On March 23, 2010, President Barack Obama signed the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act. Many of the provisions of this sweeping health care legislation will take effect in subsequent years. However, some of these health care coverage laws require action as early as October 2010.
In our prior update, we summarized the changes that must be put in place prior to this October 2010 deadline. As noted in that prior update, many health care law changes do not apply to existing health care plans that are deemed to be "grandfathered."
Recently, the Department of Health and Human Services, Labor, and Treasury issued regulations that outline the circumstances under which group health plans will lose their grandfathered status. Loss of grandfathered status will cause an existing health care plan to face the same compliance burden as a newly created plan. Thus, employers should take great care in examining a proposed change and take into account how the possible loss of grandfathered status could effect the overall operation of the plan.
