On Feb. 25, 2019, the DOL, IRS and HHS (the “agencies”) jointly issued a request for information regarding grandfathered health plans. As background, grandfathered plans are group health plans or health insurance coverage that have continuously provided coverage and have not made certain prohibited design changes since March 23, 2010. Grandfathered plans are exempt from some requirements under the ACA, including coverage of preventive services with no cost-sharing and the expanded appeals process and external review, but are still subject to other ACA provisions. Grandfathered status can be maintained indefinitely as long as the plan continues to cover at least one person, no prohibited plan design changes are made, and the required disclosure and recordkeeping obligations are met.
Consistent with Pres. Trump’s Executive Order issued on Jan. 20, 2017, the purpose of this request is to better understand challenges that group health plans and issuers face in avoiding loss of grandfathered status. The agencies aim to determine how they can help to preserve grandfathered status in ways that benefit employers, employee organizations, plan participants and other stakeholders. The agencies also seek to understand why plans have chosen to maintain grandfathered status (including costs, benefits and other factors) and why participants continue to enroll in grandfathered coverage. Finally, the agencies ask how many plan sponsors and carriers anticipate changes that would cause a loss of grandfathered status.
The request explains that the number of grandfathered plans has decreased each year since the ACA was enacted. However, despite those declining numbers, the agencies note that some employers, insurers and participants continue to find value in keeping grandfathered status. Importantly, no changes to the grandfathered rules have been made as of yet, but our team will continue to stay abreast of any modifications. Comments are due by March 27, 2019.
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