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HCR Update (51-250): Anthem's Approach to Grandfathering

Sep 08, 2010


As part of the newly enacted legislation, most employers may "grandfather" their plan by making only limited changes to the plan. 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.

For non-grandfathered plans
For plans that are not grandfathered, the following changes are also required:

For grandfathered plans
For plans that are grandfathered:

More about grandfathering 
Anthem believes there are benefits to maintaining existing benefits coverage, for those who wish to do so. Therefore, they'll offer grandfathering for most standard and non-standard benefit plans in their portfolio.

This is an important topic, and Anthem understands you and your clients may have questions. Here are some answers to common questions about grandfathering: 

Can a group make changes to its current benefit plan and maintain its grandfathered status? 
Certain limited benefit changes allowed within the legislation and interim final regulation do not impact grandfathered status, but there are very few situations in which an alternative standard plan complies. As a result, only large groups that are eligible to customize their benefits will be allowed to change their benefits and retain grandfathered status if the changes are within the level of changes allowed by the legislation. Other changes allowed according to the interim final rules are:

What changes would cause a group to lose grandfathered status?
Groups that are not eligible to customize their benefits will not be allowed to change benefits and retain grandfathering status. For a group that is eligible to customize benefits, the following changes would cause a loss of grandfathered status: 

If a group commits to making a change before March 23, 2010, does the group have to change back?
Probably not. If changes were made according to a written agreement or a filing with an insurance department before March 23, 2010, and the changes were implemented before or after March 23, 2010, the plan will likely be considered grandfathered.

If a group commits to making a change after March 23, 2010, can the group change back? According to the interim final regulations, it appears that groups that have changed benefits between March 23, 2010, and June 14, 2010, may have the opportunity to revoke or modify the changes and regain grandfathered status at their next renewal date in 2011.   

How can I help large group clients determine the impact of grandfathering or not grandfathering?
Anthem is developing a tool for large groups that can customize their benefits to evaluate how much the benefits can be adjusted and still maintain grandfathered status.  

When will we know which plans will be grandfathered?
Anthem anticipates in the next few weeks.

Anthem knows you may have more questions. You can expect more information about grandfathering in the future. And, as always, you can talk with your b&p sales representative for more information.

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