If your health plan is maintained pursuant to a collective bargaining agreement, it’s important to understand how the health care reform law’s “grandfathering” rule applies to your plan. The rules play out differently depending on whether you maintain a single employer plan that is collectively bargained or a collectively bargained multiemployer plan.
The general grandfathering rule for collectively bargained plans is that they remain grandfathered until the last of the collective bargaining agreements relating to the plan terminates, provided that the collective bargaining agreement was entered into before March 23, 2010. So, in the single employer context, if your contract was in existence prior to March 23, 2010, you should first look to the date that your contract expires. If you participate along with other employers in a multiemployer plan, then you should look to the latest contract termination date (for contracts entered into before March 23, 2010) of all the employers who participate in that plan.
The grandfathered status of the plan does not automatically end on the date the contract expires, so the next step in the analysis is to look at the plan on the date of the contract’s expiration and compare it to how the plan looked on March 23, 2010. If you made any of the following plan changes during the intervening months or years, then your plan is no longer grandfathered as of the date that the contract expires:
- Elimination of all, or substantially all, benefits to diagnose or treat a particular condition
- A change in insurance carriers
- Any increase in the employee’s share of coinsurance
- Any increase in deductible or out-of-pocket limit that exceeds 15 percent over medical inflation
- Any increase in copayments that exceeds the greater of: $5 increased by medical inflation or medical inflation plus 15 percent
- A decrease in employer contribution rates of more than five percent below that in effect on March 23, 2010
- The addition of an annual limit on the dollar value of benefits
- A decrease in any existing annual limit under the plan
If you did not make any of these types of changes, then your plan should remain grandfathered until you do make one or more of these kinds of changes. If you are a single employer plan, you can make this analysis yourself to determine if your plan can maintain grandfathered status beyond the termination date of your collective bargaining agreement. If you participate in a multiemployer plan, you should look to the plan to inform you of the grandfathered status of the plan. Questions? Contact Kristine Cienfuegos at 1-800-733-8621 or K.Cienfuegos@VigilantCounsel.org.