Frequently Asked Questions

What are the various effective dates for the provisions of the new health reform law?
Hub International has prepared a chart on effective dates of employer obligations under the new law; it also addresses grandfathered plans. Contact your HUB representative for a copy of the chart.

We currently offer a group health plan, as of the date the new law was signed. We heard we can continue that plan as a “grandfathered plan.” What does that mean?
Some provisions of the law are inapplicable to existing plans in which an individual was enrolled on the date of enactment. Grandfathered coverage can be renewed, and family members and new employees are allowed to enroll without destroying grandfathered status. However, the Reconciliation Act applies a number of mandates in the new law to grandfathered health plans. We will be following the grandfather issue particularly closely, but note that the relief the grandfather rule appears to offer is somewhat illusory, especially in light of “essential” plan mandates and related penalties.

The new law is careful to state in several provisions that simply because a grandfathered plan is modified to comply with the new law, it will not lose grandfathered status. That raises the question – will other modifications to the plan cause the plan to lose grandfathered status? If the plan is modified to change deductibles and co-pays, for example, or to revise eligibility or covered benefits, will that make the plan lose grandfathered status? The new law does not define how a plan sponsor must or must not act to maintain a plan as grandfathered. Employers will need to consider whatever standards the agencies eventually develop on this issue when considering future plan changes. Some congressional intent discussions and provisions in the law imply no plan changes are allowed to a grandfathered plan -- other than the changes specifically allowed by the new law.  Health Reform Questions PDF Download