Summary of Interim Final Rules on Grandfather Provisions Under PPACA
HCAA, www.hcaa.org
Long-awaited regulations under the grandfather provisions of Section 1251 of the Patient Protection and Affordable Care Act (PPACA) were formally issued by the Departments of Health and Human Services, Treasury and Labor (the “agencies”) on June 14, 2010. The regulations are in the form of an interim final rule, and are effective immediately. They were published in the Federal Register on June 17, 2010. Comments on the regulations are due 60 days after publication in the Federal Register.
As anticipated, the regulations provide that certain changes to a grandfathered plan will result in loss of grandfathered status. However, what was not anticipated is how restrictive a view the agencies would take with respect to the types of changes that may be made without causing the loss of the grandfather. Indeed, it can be expected that most plans will lose grandfather status over time. The effect of losing grandfather status may vary on a plan-by-plan basis, and may depend on a variety of factors, including plan size and current plan provisions.
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