Grandfathered Plans

HR Policy Association opposed the overly restrictive regulatory approach for determining the type and nature of adjustments that could be made to a plan before losing its grandfathered status under PPACA.  The health care reform law broadly defined “grandfathered health plans” as those plans offering health coverage on the date of enactment and exempted such plans from certain insurance and plan mandates imposed by the Act.  However, the unnecessarily narrow regulatory approach placed significant restraints on employers’ ability to make plan adjustments that contain costs and maintain the overall benefit structure and value for plan participants.  For most employers, maintaining the discretion to adjust their plans to control increasing health care costs trumps the advantages of grandfathered plan status.  Thus, most large employer plans have already lost their grandfathered status or will do so in the near future.