- Significantly cut or reduce benefits
- Significantly raise copayments or deductibles (For co-pays, “significantly” means the greater of $5 or a medical inflation rate plus 15%. For deductibles, it is the medical inflation rate plus 15%. Medical inflation in recent years has averaged 4-5%, meaning that plans could potentially raise deductibles by 20% and still maintain their grandfathered status.)
- Significantly lower the portion of the health coverage premium paid for by the employer
Obama Administration Issues Regulations on Employer-Sponsored Health Insurance Under Healthcare Reform
The Obama Administration has released an Interim Final Rule providing guidance on how insurance plans may obtain “grandfathered” status under healthcare reform. The Patient Protection and Affordable Care Act (PPACA) contains a number of new requirements with which insurance plans must comply; however, it also includes certain exemptions for grandfathered plans. The new regulations lay out in detail a series of restrictions on how much a plan may change and still fall under the grandfathered exemptions. Under the IFR, plans would lose their grandfathered status if they:
These regulations are effective as of June 14, 2010. The Departments of Labor, Treasury, and HHS will be accepting comments through Aug. 16, 2010. For instructions on how to submit comments, see the full text of the IFR.