On November 18, 2015, the Departments of Health and Human Services (“HHS”), Labor (“DOL”) and Treasury (collectively, the “Departments”) issued final rules regarding a variety of market reforms under the Affordable Care Act, including grandfathered plans, pre-existing condition exclusions, lifetime and annual limits, rescissions, dependent coverage, claims and appeals procedures and patient protections. This rulemaking—which finalizes the current interim final rules on these matters with very few changes—is effective on the first day of the plan year beginning on or after January 1, 2017. Some key takeaways from the final rules, including some of the changes made by the final rules, are as follows:
- Grandfathered Plans:
- Under the final rules, determination of grandfathered status for group health plans or group health insurance policies applies separately with respect to each benefit package offered by the group health plan or group health insurance coverage, and if any benefit package ceases grandfathered status, it will not affect the grandfathered status of the other benefit packages.
- To maintain status as a grandfathered plan, a group health plan or group health insurance coverage must include, in any summary of benefits provided to participants, a statement that it is a grandfathered plan, as well as contact information for questions or complaints. Prior model notice language has been retained in the final rules.
- Elimination of “all or substantially all” benefits to diagnose or treat a particular condition will cause a plan to lose its grandfathered status. The Departments declined to establish a bright-line test with regard to what constitutes “substantially all benefits,” leaving it instead to a facts-and-circumstances determination.
- Although not addressed in the final rules themselves, the preamble to the final rules notes that the imposition of wellness programs, particularly wellness programs that impose penalties, may threaten grandfathered status.