Proposed regs issued on grandfathered health plans

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

Jeff Martin
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

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