The Departments of Labor (DOL), the Treasury (IRS) and Health and Human Services (HHS) have released a sixth set of “Frequently Asked Questions” about the federal health care reform law known as the Affordable Care Act (ACA), focusing on issues of how plans lose grandfathered status. Key points include guidance on the anti-abuse provisions of the grandfathering rules—specifically, what is a “bona fide employment-based reason” for transferring employees from one grandfathered plan to another, such that the transferee plan may retain grandfathered status? The guidance also indicates that when a grandfathered plan adopts an amendment making changes that would cause a loss of grandfathered status, the status is lost immediately upon the effective date of the changes. For example, if the employer amends the plan on June 1, 2011 to make changes to copays, coinsurance or deductibles that would cause a loss of grandfathered status, but the changes don’t become effective until September 1, 2011, then the plan loses grandfathered status on September 1 and as of that date, must comply with all mandates applicable to grandfathered plans. Questions? Contact Kristine Bingman at 1-800-733-8621.
This website presents general information in nontechnical language. This information is not legal advice. Before applying this information to a specific management decision, consult Vigilant or legal counsel.