Health Care Reform Q&A With the VSCPA Insurance Center: Grandfathered Health Plan Provisions

Question: What do I need to know about grandfathered health plans?

Answer: On June 14, 2010, the Departments of Labor, Health and Human Services, and Treasury released final interim regulations relating to the status of grandfathered health plans under the Affordable Care Act (the “Act”). These regulations, published in the June 17, 2010 Federal Register, explain the rules for determining whether a group health plan or health insurance coverage qualifies as a grandfathered health plan, how that status is maintained, and how a grandfathered health plan may lose its grandfathered status. In addition, the preamble to the regulations provides helpful and important guidance for plans that are not subject to the Act’s mandates, such as those that cover fewer than two participants who are current employees and those that provide excepted benefits.

As part of their effort to provide as much information as possible to the regulated community, the agencies also released a Fact Sheet, FAQs, and a Model Grandfathered Health Plan Notice. Together with the regulations, this guidance provides a great deal of helpful information for employers to consider as they evaluate their plans’ grandfathered status. Knowing whether a group health plan or health insurance coverage is grandfathered is critical to determining which of the Act’s coverage mandates apply to the plan.

Health Care Reform Q&A is facilitated by the VSCPA Insurance Center. Have a question? Leave a comment, or contact the VSCPA Insurance Center directly. This document is not intended to imply or provide tax or legal advice and is the VSCPA Insurance Center's current interpretation of the Health Reform Bill.