The Department of Health and Human Services (HHS), Department of Labor and Department of the Treasury have issued interim final rules concerning the provision of the Patient Protection and Affordable Care Act relating to "grandfathered" health plans. The interim final rules explain which other provisions of the Affordable Care Act apply to grandfathered plans and which do not, as well as how much plans may change before losing grandfathered status. The agencies are requesting public comment on the rules.

As explained in the upcoming Federal Register notice provided by HHS, nothing in the Affordable Care Act requires that anyone terminate coverage already obtained by March 23, 2010--the date the act went into effect. In general, there are various provisions of the act that do not apply to grandfathered plans. However, other provisions of the act taking effect in September and thereafter will be applied to grandfathered plans. (Some of the provisions pertaining to grandfathered plans are outlined below. The complete details of all the rules pertaining to grandfathered plans are in the links at the bottom of the story.)

The prohibition against pre-existing condition exclusions is applicable to grandfathered group health plans and group health insurance coverage, but not to individual coverage. The prohibition on lifetime limits and prohibitions on rescissions are applicable to all grandfathered plans. Prohibitions on annual limits are applicable to grandfathered group health plans and group health insurance coverage, but not to grandfathered individuals. The extension of dependent coverage until age 26, the development of uniform explanation of coverage and standardized definitions, and bringing down cost of health care coverage are applicable to all grandfathered plans.

One of the important considerations the rules are clarifying is how much a grandfathered plan can change and still be considered grandfathered. The rules state that if a plan eliminates all or substantially all benefits to diagnose or treat a particular condition, the plan ceases to be a grandfathered health plan. In addition, the elimination of benefits for any necessary element to diagnose or treat a condition will be considered an elimination of all benefits to diagnose or treat a particular condition. For example, let's say that a plan provides benefits for a particular mental health condition, and the treatment is a combination of counseling and prescription drugs. If the benefits for counseling are eliminated, the plan is treated as having eliminated all or substantially all benefits for that mental health condition.

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