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Long-awaited guidance defining what is a “grandfathered health plan” under health care reform was issued in the form of
interim final rules by the U.S. departments of the Treasury, Labor, and Health and Human Services and published in the
Federal Register on June 17, 2010. (For an overview of the regulations, see the
HR News report "Rules Would Restrict Employer Changes to Health Care Plans.")
The regulations carve out a broader exemption from many of the new health care reform mandates and restrictions for insured health care plans subject to collective bargaining agreements, so long as these plans existed when the health care reform law was enacted. The regulatory provisions that relate to these union-negotiated plans are described below.
There is no special grandfathering rule for self-insured collectively bargained plans. Therefore, a self-insured plan maintained pursuant to one or more collective bargaining agreements between employee representatives and one or more employers is only a grandfathered health plan to the extent that it satisfies the requirements described above and does not make any changes that result in the loss of grandfathered health plan status.
The guidance clarifies that there is no delayed effective date for health care reform requirements that apply to collectively bargained plans. Grandfathered collectively bargained health plans are subject to the same requirements as other grandfathered health plans, so changes may be required to bring a collectively bargained health plan into compliance with health care reform in the middle of a collectively bargained agreement period.
Susan M. Nash, Amy M. Gordon, Jamie A. Weyeneth and Elizabeth A. Savardare all partners with the employee benefits and pensions practice group of global law firm
McDermott Will & Emery LLP. This article is excerpted from a longer
analysis of the interim final rules by the authors.
© 2010 McDermott will & Emery LLP. All Rights Reserved.
This article should not be construed as legal advice
is an online editor/manager for SHRM.
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