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The new law allows plans to be grandfathered i.e. not subject to all the law requires. However, compliance is difficult.
To be grandfathered a plan must have at least one person enrolled as of March 23, 2010 when the law was passed. One person must remain enrolled although it does not have to be the same person.
If a grandfathered plan doesn't make any non-allowed changes, it will remain a grandfathered plan indefinitely. Take a look at what causes the loss of grandfathered status: .
- If the grandfathered plan enters into a new policy or contract of insurance. Renewal will cause the loss of grandfathers status.
- If an insurer eliminates benefits that are normally covered.
- If there is an employee cost share increase by 5% or more.
- If the coinsurance provision is increased compared to what was in effect when grandfathered.
- If the employee share of out of pocket limits, deductibles etc are increased by more than about 15%.
- If the co-pay increases by more than $5.
- The imposition of a lifetime or annual limit where one did not exist before, or a reduction in the limit if one did exist.
If a plan loses its grandfathered status, it will become subject to all of the changes of, The Patient Protection and Affordable Care Act.
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