Close
Close

Proposed regs issued on grandfathered health plans

RFP
Tax Hot Topics newsletter The IRS, Department of Labor, and Department of Health and Human Services jointly released proposed regulations (REG-130081-19) that would enable certain employer health plans in existence before the Affordable Care Act (ACA) took effect to raise certain copayments and deductibles, within limits, without losing their “grandfathered” status.

Such plans would be subject to only certain provisions of the ACA. For example, under the proposed regulations, plans would not lose grandfathered status if increases to their fixed amount cost-sharing requirements do not exceed the greater of either:

  • Medical inflation since March 23, 2010, expressed as a percentage, plus 15 percentage points
  • The portion of the premium adjustment percentage (as defined in 45 CFR 156.130(e)) that reflects the relative change between 2013 and the calendar year prior to the effective date of the increase (that is, the premium adjustment percentage minus 1), expressed as a percentage, plus 15 percentage points

Contacts:
Jeff Martin
Partner
Washington National Tax Office
T +1 202 521 1526

Keith Mong
Managing Director
Washington National Tax Office
+1 202 521 1554

James Sanchez
Senior Associate
Washington National Tax Office
+1 202 861 4107

Tax professional standards statement 
This content supports Grant Thornton LLP’s marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. If you are interested in the topics presented herein, we encourage you to contact us or an independent tax professional to discuss their potential application to your particular situation. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. To the extent this content may be considered to contain written tax advice, any written advice contained in, forwarded with or attached to this content is not intended by Grant Thornton LLP to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.

The information contained herein is general in nature and is based on authorities that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice provided by Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, the reader’s specific circumstances or needs and may require consideration of tax and nontax factors not described herein. Contact Grant Thornton LLP or other tax professionals prior to taking any action based upon this information. Changes in tax laws or other factors could affect, on a prospective or retroactive basis, the information contained herein; Grant Thornton LLP assumes no obligation to inform the reader of any such changes. All references to “Section,” “Sec.,” or “§” refer to the Internal Revenue Code of 1986, as amended.