Plans Allowed to Retain "Grandfathered" Status After Changing Insurance Coverage

On November 17, 2010, the U.S. Departments of the Treasury, Labor, and Health and Human Services released an amendment to the interim final regulations related to establishing and retaining a plan's grandfathered status under the Patient Protection and Affordable Care Act (PPACA). The amendment provides guidance on when fully insured group health plans may change policies, certificates, or contracts of insurance without losing grandfathered status.

The amendment applies to changes to group health insurance coverage that are effective on or after November 15, 2010. The important date for this purpose is the effective date of the new coverage, not the date the plan enters into a new agreement for coverage. For example, if a plan enters into an agreement with an issuer on November 1, 2010 for a new policy to be effective January 1, 2011, the new policy will be covered under the amendment because it will not become effective until after November 15, 2010.