Health & Welfare Plans Newsletter

BULLETIN
July 10, 2020

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[Official Guidance]

Text of Agency Proposed Regs: Grandfathered Group Health Plans and Grandfathered Group Health Insurance Coverage

76 pages. "This notice of proposed rulemaking would, if finalized, amend the 2015 final rules to provide greater flexibility for grandfathered group health plans and issuers of grandfathered group health insurance coverage to make certain changes without causing a loss of grandfather status. However, there is no authority for non-grandfathered plans to become grandfathered, and therefore these proposed rules would not provide any opportunity for a plan or coverage that has lost its grandfather status under the 2015 final rules to regain that status....

"These proposed rules would amend the 2015 final rules in two ways.

  • First, these proposed rules include a new paragraph (g)(3) which would specify that grandfathered group health plans and grandfathered group health insurance coverage that are HDHPs may make changes to fixed-amount cost-sharing requirements that would otherwise cause a loss of grandfather status without causing a loss of grandfather status, but only to the extent those changes are necessary to comply with the requirements for HDHPs under section 223(c)(2) of the Code.
  • Second, these proposed rules include a revised definition of 'maximum percentage increase' in redesignated paragraph (g)(4), which provides an alternative method of determining that amount based on the premium adjustment percentage. This alternative method would be available only for grandfathered group health plans and grandfathered group health insurance coverage with changes that are effective on or after the effective date of a final rule.

"The Departments request comments on all aspects of these proposed rules. "

Employee Benefits Security Administration [EBSA]; U.S. Department of Labor [DOL] Internal Revenue Service [IRS]; Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]

[Guidance Overview]

Text of Agency FAQs About Proposed Regs for Grandfathered Group Health Plans and Grandfathered Group Health Insurance Coverage (PDF)

"Based on comments received from stakeholders in response to the 2019 request for information, the Departments have developed a proposed rule that would, if finalized, provide greater flexibility for grandfathered group health plans and issuers of grandfathered group health insurance coverage to make certain changes to cost-sharing requirements without causing a loss of grandfather status. The proposed rule would not affect requirements for grandfathered individual health insurance coverage to maintain its grandfather status.... If finalized, the proposed rule would amend the 2015 final regulations in two ways: [1] Flexibility for High Deductible Health Plans (HDHP) ... [2] Alternative inflation adjustment for fixed-amount cost-sharing increases."

Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]; Internal Revenue Service [IRS]; and Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]

Agencies Issue Proposed Rule to Increase Flexibility for Grandfathered Group Health Plans

" 'The fact that a significant number of grandfathered group health plans remain indicates that some employers have found value in preserving grandfather status,' said Acting Assistant Secretary for [EBSA] Jeanne Klinefelter Wilson. 'Today's proposed rule is an important step towards enabling these plans to continue offering affordable coverage while also enhancing their ability to respond to rising healthcare costs.' "

Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

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