If your health plan was purchased prior to March 23, 2010 it is considered to have grandfathered status and doesn’t have to follow the ACA’s rules and regulations or offer the same benefits, rights or protections as a new plan purchased. However, according to the health care reform law if the following changes or adjustments are made to the plan they can cause the loss of grandfathered status:
- A significant cut or reduction in benefits by eliminating all or substantially all of the benefits to diagnose or treat a condition, or any necessary element to diagnose or treat a condition.
- Raising coinsurance charges.
- Significantly raising fixed cost-sharing (deductibles and out-of-pocket limits) by more than medical inflation (as measured from March 23, 2010) plus 15 percentage points.
- Significantly raising copayment charges by more than the greater of: medical inflation (as measured from March 23, 2010) plus 15 percentage points or $5 (adjusted for medical inflation).
- Significantly lowering the rate of employer contributions by 5 percentage points for any coverage tier.
- Adding or tightening an annual limit on what the health plan pays.
- Reclassifying employees so that the reclassified employees are eligible for a different plan (even if it’s a grandfathered plan), without a bona fide employment reason.
- Failing to continuously maintain at least one covered individual (not necessarily the same individual).
Group health plans and health insurers must maintain records documenting the terms of the plan in effect on March 23, 2010 and any other documents necessary to verify, explain or clarify its status as a grandfathered plan.
To learn more on how Paypro can help your organization with Benefits Solutions and other requirements of the Affordable Care Act please contact us or request a consultation with one of our Benefits Specialists.