Regulation Issued on Grandfathered Health Plans Under Healthcare Reform Law
The Department of Health and Human Services today announced new regulations surrounding the “grandfather rule” included in the healthcare reform law.
Under healthcare reform, all health plans must provide new benefits to consumers; however, plans that existed on March 23, 2010 are “grandfathered,” meaning they are exempt from some new requirements.
Up until this point, it has been unclear what changes a plan can make without losing its grandfather status. The regulations detailed today clarify some of these points.
According to the regulations, health plans can make routine changes without losing their grandfather status. This includes cost adjustments to keep pace with medical inflation, adding new benefits, making small adjustments to existing benefits, voluntarily adopting new consumer protections under the new law, or making changes to comply with state/other federal laws.
Premium changes are not taken into account when determining whether or not a plan is grandfathered.
Health plans will forfeit their grandfather status if they significantly cut benefits or increase out-of-pocket spending for consumers; consumers in plans that make such changes will also gain new consumer protections (e.g., coverage of recommended prevention services with no cost sharing, access to OB-GYNs and pediatricians without a referral by a separate primary care provider, etc.)
