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HR and Tax Newsletter - July 2010

Health Care Reform

Grandfather Regulations for Plans



Key Items


Regulations have been issued which tell employers how group health plans in existence on March 23, 2010 can be exempt from some of the new health reform laws.  The exemptions apply to such things as:


- The new independent appeals process;

- Prohibitions on eligibility discrimination based on salary;

- Prohibitions on co-pays or deductibles for preventive health care.


Grandfathered plans need not offer coverage to adult dependent children if the child is eligible for another employer sponsored health plan.


However, this favored status can be lost. Some of the ways this can happen are:     

- A change of insurers;

- An increase in cost sharing;

- An increase in cost sharing and co-payments (if limits are exceeded)


The bottom line is that employers must decide now if it makes sense to preserve grandfather status.


Donít hesitate to contact us if you have questions or would like more information about how these new changes in the law affect your company.