Under the Patient Protect and Affordable Care Act of 2010 grandfathered health plans can become “exempt” from some of the new law provisions however the rules and regulations do set limits on what the grandfathered plan can change before it loses it status. If a Grandfathered plan does any of the following it will lose its status:
- Cannot significantly cut or reduce benefits – for example, if your plan covers care for people with diseases such as diabetes, cystic fibrosis or HIV/AIDS, the plan cannot eliminate coverage for those diseases;
- Cannot raise co-insurance charges – for example, it increases your share of a hospital bill from 20% to 25%;
- Cannot significantly raise co-payment charges – for example, it raises its copayment from $30 to $50 over the next 2 years;
- Cannot significantly raise deductibles – for example, it raises a $1,000 deductible by $500 over the next 2 years;
- Cannot significantly lower employer contributions by more than 5 percent – for example, it increases its workers’ share of the premium from 15% to 25%;
- Cannot add or tighten an annual limit on what the insurer pays. Some insurers cap the amount that they will pay for covered services each year. If they want to retain their status as grandfathered plans, plans cannot tighten any annual dollar limit in place as of March 23, 2010. Moreover, plans that do not have an annual dollar limit cannot add a new one unless they are replacing a lifetime dollar limit with an annual dollar limit that is at least as high as the lifetime limit (which is more protective of high-cost enrollees).
All health plans-whether or not they are grandfathered MUST provide certain benefits to their customers for plan years starting on or after September 23, 2010. These required changes are:
- No lifetime limits on coverage for all plans;
- No rescissions of coverage when people get sick and have previously made an unintentional mistake on their application;
- Extension of parents’ coverage to young adults under 26 years old
- No coverage exclusions for children with pre-existing conditions
- No “restricted” annual limits (e.g., annual dollar-amount limits on coverage below standards to be set in future regulations
As an employer, you are required to notify your employees if you Healthcare Plans are classified as a grandfathered or non-grandfathered. These required notifications must be done when a member is newly hired and during open enrollment, these notices are also different based on the status of the plan. BBG is happy to assist you in maintaining compliance in your workplace. If you have questions and would like further information please contact us by sending an email firstname.lastname@example.org.