Maintaining Grandfathered Health Plan Status

Group health plan coverage that was in place on March 23, 2010 (the date that healthcare reform was enacted), and continuously thereafter are exempt from some health care mandates that otherwise apply to group health plans. This rule providing exemption is known as the “grandfather rule,” thus these plans are referred to as grandfathered health plans. However, plans can permanently lose grandfathered status if certain coverage or design changes are made. As a result, employer-sponsors who wish to preserve a plan’s grandfathered status should understand the plan design changes that are permissible and take care to avoid implementing any change that would cause an unintended loss of grandfathered status.