Many group Health Insurance plans subject to collective bargaining agreements are grandfathered under Affordable Care Act (ACA).
What does “grandfathered” mean?
Your plan is considered a “grandfathered plan” if was in place as of March 23, 2010 (the date of enactment of the ACA) and certain changes have not been made. If your plan is grandfathered, it means that it is subject only to certain provisions of the Affordable Care Act and not subject to other provisions.
List of ACA Mandates that apply to grandfathered group Health Insurance plans
- Prohibition of preexisting condition exclusion or other discrimination based on health status
- Prohibition on excessive waiting periods
- No lifetime or annual limits
- Prohibition on rescissions
- Extension of dependent coverage until age 26
- Development and utilization of uniform explanation of coverage documents and standardized definitions
- Bringing down cost of health care coverage (for insured coverage)
- Pay-or-Play Penalties
Maintaining grandfathered status
The law includes a special rule for fully insured collectively bargained plans that allow a change in insurers during the collective bargaining agreement. However, if you make any substantial changes to your plan design, you will lose your grandfathered status and are subject to the same rules as other health plans.
When does the plan lose grandfathered status?
Fully-insured health plans will be able to maintain their grandfathered status until their agreement terminates. As the agreements come up for renewal or are renegotiated, collectively bargained health plans will be subject to the same rules as non-collectively bargained plans.
Next Steps
The bulk of the ACA rules are effective on the first day of the health plan year following January 1, 2014. If you have not yet begun preparations for the new requirements, it’s a good idea to start now. A thorough review should be completed to determine when contracts renew and what changes, if any, must be made to ensure compliance with the ACA.
For help determining if you plan is grandfathered, download our Compliance Checklist for Determining Grandfathered Status.
For more information on grandfathered plans including what is permitted and what is prohibited, download our Overview of Grandfathered Plans.
Links to actual legislation:
http://www.irs.gov/irb/2010-29_IRB/ar08.html#d0e503
http://www.law.cornell.edu/cfr/text/29/2590.715-1251
