A grandfathered health plan is an insured or self-funded health plan that was in existence on or before March 23, 2010 and that has not made changes since that date that cause it to lose its grandfathered status.
Changes that will cause a plan to lose its grandfathered health plan status include:
- Elimination of all or substantially all benefits to diagnose or treat a particular condition.
- Any increase in the employee percentage of co-insurance charges.
- Increase in a deductible or out-of-pocket maximum by an amount that exceeds medical inflation plus 15 percentage points.
- Increase in an employee co-payment by an amount that exceeds medical inflation plus 15 percentage points (or, if greater, $5 plus medical inflation).
- Decrease in the employer contribution rate toward the cost of coverage by more than 5 percentage points below the employer contribution rate on March 23, 2010.
- Imposition of new annual limits if the plan did not include them on March 23, 2010, or a decrease in existing annual limits below the lifetime limit.
- Changing employees to a less generous plan; corporate mergers/sales to avoid compliance.