June 15, 2010 – Grandfathered Plan Guidance
Yesterday, Federal agencies released draft interim regulations under the Internal Revenue Code, ERISA, and the Public Health Services Act (“PHSA”) implementing the grandfathered plan provision of the Patient Protection and Affordable Care Act (the “PPACA”). A copy of the draft regulations is available at: http://www.federalregister.gov/OFRUpload/OFRData/2010-14488_PI.pdf. The final interim regulations are expected to be published in the Federal Register later this week.
Grandfathered plans, as defined in the new regulations, are exempt from complying with certain requirements of the PPACA. The regulations include numerous conditions a plan must satisfy to retain its grandfathered status, including restrictions on the types of changes that may be made to the plan after March 23, 2010. Due to the restrictive nature of these requirements, it is expected that over time most grandfathered plans will lose their grandfathered status.
Please contact us if you have any questions regarding the regulations or the application of the rules to your plan.