Request for Information Regarding Grandfathered Group Health Plans and Grandfathered Group Health Insurance Coverage, 26 CFR Part 54; 29 CFR Part 2590; 45 CFR Parts 144, 146, and 147; 84 Fed. Reg. 5969 (Feb. 25, 2019)
The DOL, IRS, and HHS have issued a request for information on grandfathered health plans. Grandfathered plans are group health plans (or health insurance coverage) that have continuously provided coverage since March 23, 2010, and have not undergone certain prohibited design changes since then. These plans are excused from some requirements under the Affordable Care Act (ACA), such as coverage of preventive health services without any cost-sharing and the expanded appeals process and external review, but are subject to other provisions (see our Checkpoint Question of the Week). Grandfathered status can be maintained indefinitely so long as the plan or coverage continues to cover at least one person; no prohibited plan design changes are made; and the required disclosure and recordkeeping requirements are met.
The request explains that, consistent with the objective of Executive Order 13765 to minimize the ACA’s economic and regulatory burdens (see our Checkpoint article), the agencies are gathering input to better understand the challenges for plans and insurers in avoiding loss of grandfathered status. Noting that the final regulations provide that grandfathered status cannot be regained once it is lost and there is no authority for non-grandfathered plans to become grandfathered, the agencies request input on actions they can take to help grandfathered plans maintain their status. They also ask why plans have chosen to preserve grandfathered status (including costs, benefits, and other factors) and why participants continue to enroll in grandfathered coverage. The request also provides some current statistics on grandfathered plans: In 2018, approximately 20% of employers that offered health benefits offered at least one grandfathered group health plan—down from 72% in 2011. And 16% of workers with employer-sponsored coverage were enrolled in a grandfathered group health plan in 2018—down from 56% in 2011. The agencies ask how many plan sponsors and insurers contemplate changes that would cause loss of grandfathered status.
EBIA Comment: As the request explains, the number of grandfathered plans has decreased each year since the ACA was enacted. In addition to the statistics supplied in the request, we note that in 2015, when final regulations were issued, the agencies estimated that more than 40 million participants and beneficiaries were covered by grandfathered plans (see our Checkpoint article). Despite the declining numbers, the agencies note that some employers, insurers, and participants continue to find value in grandfathered plans. It will be interesting to see what information is collected and how it translates into future guidance. For more information, see EBIA’s Health Care Reform manual at Section VI (“Grandfathered Health Plans”).
Contributing Editors: EBIA Staff.