By Mark C. Blackwell
Group health plans that are in place as of March 23, 2010 are “grandfathered” and many of the new health plan mandates applicable to new plans either do not apply, or do not apply until future years. However, a number of new rules apply effective the first plan year that starts after Sept. 23, 2010, even if the group plan is grandfathered. The primary rules that apply to grandfathered plans on January 1, 2011 (for calendar year plans) include:
Extension of Dependent Coverage. If the plan covers dependents, coverage for adult children is extended until age 26 (i.e., through age 25), unless the child is eligible to enroll in another eligible employer-sponsored health plan (until 2014).
Prohibition on Lifetime Limits. Applies to all group health plans. An individual whose coverage ended due to a lifetime limit is eligible to reenroll when the new rule takes effect.
Prohibition on Annual Limits. Applies to all group health plans, subject to (i) a transition rule and (ii) possible “waiver” where the transitional rule “would result in a significant decrease in access to benefits” or “would significantly increase premiums.” The “transition rule” permits an annual limit no lower than $750,000 for 2011 plan year; $1.25 million for 2012 plan year; and $2 million for 2013 plan year. The “waiver” is available by application to HHS and must be made no later than 30 days before the start of the plan year. It is primarily available to so-called “limited benefit” plans or “mini med” plans that are made available to part-time employees, seasonal workers, etc.
Pre-existing Condition Exclusion (under age 19). Applies to enrollees under age 19; applies to all covered individuals effective 2014.
Prohibition on Rescissions. Coverage cannot be rescinded after enrollment, except for fraud or intentional misrepresentation of a material fact.