The Departments of Labor, Treasury, and Health and Human Services have issued a joint request for information on grandfathered health plans and grandfathered group insurance coverage. Grandfathered plans are group health plans or health insurance coverage that have continuously provided coverage since March 23, 2010, and have not made certain prohibited design changes since that time. These plans are not subject to certain health reform requirements under the Affordable Care Act (ACA) such as required coverage of preventive health services without any cost-sharing and the expanded appeals and external review process.
The request indicates that the departments are issuing the request to gather input from the public in order to better understand the challenges that group health plans and group health insurance issuers face in avoiding a loss of grandfathered status and to determine whether there are opportunities for the departments to assist plans and issuers in preserving grandfathered plan status to benefit employers, employee organizations, plan participants and beneficiaries, and other stakeholders. The request notes that it is being issued in accordance with the objective of Executive Order 13765, which seeks to minimize the ACA’s economic and regulatory burdens. Noting the limited guidance on grandfathered plans and that the final regulations provide that grandfathered status cannot be regained once it is lost, the agencies are requesting input as to actions they could take to help grandfathered plans maintain their status. Comments are requested by 5 p.m. on March 27, 2019; they may be submitted electronically at http://www.regulations.gov, by regular mail, or by express or overnight mail.
The request sets forth eight categories of questions regarding maintaining (or relinquishing) grandfathered plan status. It also includes another six questions regarding general information about grandfathered plans. The questions are quite broad and appear to be designed to give stakeholders broad latitude to submit comments on grandfathered plans. In the request, the agencies are asking generally why plans have chosen to preserve grandfathered status (including costs, benefits, and other factors) and why participants continue to enroll in the grandfathered health plan coverage. Citing the Kaiser Family Foundation, the request states that, in 2018, approximately 20 percent of employers that offered health benefits offered at least one grandfathered plan, which is a decrease from 72 percent in 2011. In addition, 16 percent of workers with employer-sponsored coverage were enrolled in a grandfathered plan in 2018, which is decrease from 56 percent in 2011.
While the number of grandfathered plans has decreased, it is evident that some employers, insurers, and participants continue to find grandfathered plans valuable. It remains to be seen how stakeholders will respond and how their comments may affect future guidance.