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  • Proposed Rules allow for More Flexibility to Grandfathered Group Health Plans

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Proposed Rules allow for More Flexibility to Grandfathered Group Health Plans

July 15, 2020 Joanna Kim-Brunetti Affordable Care Act
Proposed Rules allow for More Flexibility to Grandfathered Group Health Plans

2 minute read:

The Treasury, the Internal Revenue Service, the Department of Labor and the Department of Health and Human Services have jointly released a notice of proposed rulemaking to increase flexibility to grandfathered group health plans. See. These proposed rules are expected to be published on July 15, 2020 on the federal register. If these rules are finalized, they would amend current rules for grandfathered group health plans to make changes to certain types of cost-sharing requirements without causing a loss of grandfathered status.

These proposed rules would not change the current requirements, including certain employee disclosures and documentation, applicable to grandfathered health plans. Instead, these proposed rules would enable grandfathered plans to continue while also enhancing their ability to respond to rising healthcare costs. These proposed rules include an amendment to the definition of “maximum percentage increase” to allow for the alternative standard of using premium adjustment percentage rather than medical inflation to account for healthcare costs changes over time. Additionally, certain grandfathered group health plans that are high deductible health plans (HDHPs) could still retain grandfathered status while making changes to its cost-sharing requirements to allow enrolled individuals to be eligible to contribute to an HSA.

Grandfathered group health plans are those that were in effect on March 23, 2010, when the ACA was enacted. These plans are considered “minimum essential coverage” under the ACA’s Employer Mandate. Under this Mandate, employers with 50 or more full-time employees and full-time equivalent employees are required to offer Minimum Essential Coverage to at least 95% of their full-time workforce (and their dependents) whereby such coverage meets Minimum Value and is Affordable for the employee or be subject to Internal Revenue Code (IRC) Section 4980H penalties.

Failing to get comply with the Employer Mandate can result in penalty assessments from the IRS. The agency is currently issuing ACA non-compliance penalty notices in Letter 226J for the 2017 tax year. Employers should seek out expert ACA compliance consultants to prepare for increased ACA compliance as more independent contractors become full-time employees under the ACA.

We’re committed to helping companies reduce risk, avoid penalties, and achieve 100% ACA compliance. For questions about the ACA contact us here.

Summary
Proposed Rules allow for More Flexibility to Grandfathered Group Health Plans
Article Name
Proposed Rules allow for More Flexibility to Grandfathered Group Health Plans
Description
Proposed rules are expected to be issued to allow for more flexibility to Grandfathered Group Health Plans.
Author
Joanna Kim-Brunetti
Publisher Name
The ACA Times
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The ACA Times
Short URL of this page: https://acatimes.com/nyu
Joanna Kim-Brunetti

Joanna Kim-Brunetti

Joanna Kim-Brunetti, Esq., is Chief Legal Officer for Trusaic.

View more by Joanna Kim-Brunetti

Related tags to article

ACA ComplianceACA Employer MandateAffordable Care ActDepartment of Health and Human ServicesDepartment of Labor (DOL)Grandfathered Group Health PlansHealth Care CoverageHealth Savings Account (HSA)High Deductible Health Plans (HDHPs)Internal Revenue ServiceIRC Section 4980H PenaltiesIRS Letter 226JMinimum Essential Coverage (MEC)Minimum Value (MV)
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