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HCR Update (2-50): Grandfathering Plans

Sep 08, 2010

Small Group News

Information about health care reform and grandfathering plans 

As you know, the Patient Protection and Affordable Care Act (PPACA) has brought significant changes. As part of the newly enacted legislation, most employers may "grandfather" their plan by making only limited changes to the plan.

The following changes can be made to plans without impacting its grandfathered status:

  • Add family members of an individual who is enrolled in a grandfathered plan
  • Add new employees of an employer who is enrolled in a grandfathered plan
  • Remove one or more individuals enrolled on March 23, 2010 from coverage (provided that the plan or coverage has continuously covered someone since March 23, 2010)
  • Make changes that are required to conform to legal requirements/changes
  • Reduce employer contributions, based on the cost of coverage or a formula, by less than 5 percentage points below the contribution rate on March 23, 2010

Generally, a plan is considered to be "grandfathered" if employers continue to offer the same benefit plan in which affected employees were enrolled on March 23, 2010, with adjustments only for enhanced benefits as required by PPACA or other state or federal law.

All plans will be adjusted to include the following enhancements beginning on or after September 23, 2010 regardless of whether the plan is or isn't "grandfathered":

  •  Allowing members to add dependents up to age 26 regardless of student status in accordance with the terms of the plan
  • Removing pre-existing exclusions for members under 19
  • Adjusting certain other annual limits on policies
  • Providing in-network preventive care coverage at 100%

See more information on Grandfathered plans here.

Enhancements to a Groups Non-Grandfathered Health Plan
Non-grandfathered plans, will also include these benefits:

  • No cost-sharing for in-network preventive services
  • Coverage for clinical trials for life-threatening diseases subject to a plan's normal restrictions on benefits and out-of-network providers
  • Coverage for emergency services without prior authorization and with the same cost share as in network
  • Designation of a pediatrician as a child's primary care provider; no authorization to see an OB-GYN
  • In addition, plans must abide by internal and external appeals standards to be determined by regulations. Plans can't distinguish or provide different levels of benefits based on salary or job title.

Certain other annual limits on group policies will be adjusted.

(Anthem will offer both Grandfathered and Non-Grandfathered plans within the EmployeeElect portfolio, but only Non-Grandfathered plans on the EmployeeChoice and BeneFits portfolios.)  

See more information on non-grandfathered plans here.

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