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An employer-sponsored health plan can be grandfathered if it covered employees when the Affordable Care Act (ACA) was enacted on March 23, 2010, and if the plan does not make certain changes that lower benefits or employer contributions, or does not increase employee-paid deductible, coinsurance or copayment costs.
Grandfathered plans cannot materially change the cost-share, employer contribution levels or benefits (see list below). While grandfathered plans may have lower premiums than some non-grandfathered plans, other factors such as medical trends and benefits design (e.g., variations in deductibles) may have an impact on renewal rates.
Employees need to be notified of the grandfathering status.
The employer will continue to use their current practices to work with issuers to obtain and maintain coverage.
Employers will submit required reporting to the Internal Revenue Service starting in 2016. For more information about reporting requirements:
Employers with 50 or more full-time equivalent employees may be subject to shared-responsibility penalties if coverage either does not meet affordability or minimum value requirements. Employers must offer coverage to 95 percent of full-time employees and their dependents.
Employers will have the ability to revise their voluntary benefits package, even though the medical benefits package is grandfathered. These policies provide peace of mind to employees by helping with out-of-pocket costs associated with illness or injury. Learn more at Aflac.com.
This material is intended to provide general information about an evolving topic and does not constitute legal, tax or accounting advice regarding any specific situation. Aflac cannot anticipate all the facts that a particular employer or individual will have to consider in their benefits decision-making process. We strongly encourage readers to discuss their HCR situations with their advisors to determine the actions they need to take or to visit healthcare.gov (which may also be contacted at 1-800-318-2596) for additional information.