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PPACA: How to Disclose Grandfathered Plan Status

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Grandfathered health plans can let participants know about the grandfathered status when they provide summary plan descriptions.

Federal officials discuss the issue in an answer to a frequently asked question (FAQ) posted by the Employee Benefits Security Administration (EBSA).

EBSA, an arm of the U.S. Department of Labor, has developed the answer, which implements part of the Affordable Care Act, the legislative package that includes the Patient Protection and Affordable Care Act (PPACA), together with officials at the U.S. Treasury Department and the U.S. Department of PPACA TookitHealth and Human Services (HHS).

The new FAQ answers posting is the fourth batch of PPACA FAQs that the departments have released.

One section in the departments’ interim final grandfather regulations states that a grandfathered health plan must notify participants or beneficiaries that it believes it is a grandfathered health plan in any description of plan benefits provided.

“Must a grandfathered health plan provide the disclosure statement every time it sends out a communication, such as an EOB (explanation of benefits), to a participant or beneficiary?” officials were asked. “If not, how does a grandfathered health plan comply with this disclosure requirement?”

The departments say a grandfathered health plan can comply with the requirement by including the disclosure language recommended in the interim regulations, or

a similar statement, whenever a summary of the plan benefits is provided.

“For example, many plans distribute summary plan descriptions upon initial eligibility to receive benefits under the plan or coverage, during an open enrollment period, or upon other opportunities to enroll in, renew, or change coverage,” officials say.

It is not necessary to include the disclosure statement with each communication to participants, such as an explanation-of-benefits notice, officials say.

But “the departments encourage plan sponsors and issuers to identify other communications in which disclosure of grandfather status would be appropriate and consistent with the goal of providing participants and beneficiaries information necessary to understand and make informed choices regarding health coverage,” officials say.


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