Eliminating beneficiary (e.g., spouse) coverage

[Guest Sieve]

What if health plan A eliminates spouse coverage if the spouse has another available group health plan? Or eliminates coverage for spouse and/or dependents entirely? Does this cause health plan A to lose grandfathered status?

Elimination of coverage for groups of individuals/beneficiaries does not seem to be one of the listed events that causes the loss of grandfathered status. Yet, that result is counter-intuitive to me, since that would permit individuals to be dropped until the plan becomes, for example, for officers only--yet, if it still a grandfathered plan despite the elimination of eligibility, then it would not be subject to the non-disrimination rules even though it became a discriminatory plan.

What am I missing?

[Guest Ira Hayes]

What if health plan A eliminates spouse coverage if the spouse has another available group health plan? Or eliminates coverage for spouse and/or dependents entirely? Does this cause health plan A to lose grandfathered status?

Elimination of coverage for groups of individuals/beneficiaries does not seem to be one of the listed events that causes the loss of grandfathered status. Yet, that result is counter-intuitive to me, since that would permit individuals to be dropped until the plan becomes, for example, for officers only--yet, if it still a grandfathered plan despite the elimination of eligibility, then it would not be subject to the non-disrimination rules even though it became a discriminatory plan.

What am I missing?

[Guest Ira Hayes]

Employer mandate applicable to all employees working 30 hours a week or more at start of of plan year beginning in 2014

[Guest Benefits Broker CO]

Although it does seem counter-intuitive, I would think that elimination of dependent eligibilty, in and of itself, would not cause a group to lose grandfathered status, since PPACA addresses employee coverage only under group plans.

[gregmk]

Has anyone found an answer to this questions? Specifically, I can't find anything that prevents a grandfathered plan from dropping spousal coverage and maintaining grandfathered status? I suppose it could be considered a reduction in employer contribution rate for the "employee + spouse teir," but I think that's a stretch.

[Peter Gulia]

If a group health plan allows an employee to cover his or her spouse only if the spouse does not have an offer of coverage from another group health plan, what sources of information would such a plan's administrator use to determine whether a spouse has or lacks another offer of coverage?

If the only source of information is the employee's written statement, how reasonable is it for the plan's administrator to assume that an employee who seeks coverage for his or her spouse tells the truth?

If the information to be evaluated goes beyond accepting at face value the employee's (and spouse's) statements, what research and investigation methods would the plan's administrator use?

[gregmk]

If a group health plan allows an employee to cover his or her spouse only if the spouse does not have an offer of coverage from another group health plan, what sources of information would such a plan's administrator use to determine whether a spouse has or lacks another offer of coverage?

If the only source of information is the employee's written statement, how reasonable is it for the plan's administrator to assume that an employee who seeks coverage for his or her spouse tells the truth?

If the information to be evaluated goes beyond accepting at face value the employee's (and spouse's) statements, what research and investigation methods would the plan's administrator use?

I was referring to a grandfathered plan that offered spousal coverage and amended to no longer offer spousal coverage at all, regardless of whether the spouse has an offer of coverage elsewhere.

Correct me if I’m wrong, but I don’t believe the ACA requires spousal coverage (unlike dependent coverage.)

[Peter Gulia]

I regret missing your hypo.

[Peter Gulia]

To avoid the play-or-pay excise tax, a large employer need not offer health coverage for its employee's spouse. Internal Revenue Code 4980H(a)(1).

[Chaz]

I haven't looked at the grandfathered rules in awhile but I believe that they say that only the enumerated changes will cause a plan to lose grandfathered status. Making spouses ineligible for coverage is not one of the enumerated changes so I believe that the plan can otherwise maintain grandfathered status,'

I agree with Peter that spouses are not required to be offered coverage in order to avoid the mandate taxes. In fact, I argue that a technical reading of the statute indicates that dependent children also do not have to be offered coverage to avoid the penalty.

I imagine that the DOL/HHS/IRS will disagree with me on that last point.

[gregmk]

I haven't looked at the grandfathered rules in awhile but I believe that they say that only the enumerated changes will cause a plan to lose grandfathered status.

I'm not sure this is in the rules, but it is clearly stated in Q1 of EBSA's ACA Implementation FAQs Part II.