Rule Providing Relief for Grandfathered Health Plans Finalized

Employee Benefits Alert

Client Alert


The Departments of Labor (DOL) and Health and Human Services (HHS) and the Treasury have finalized a rule for grandfathered group health plans under the Affordable Care Act (ACA) without making any substantive changes from its proposed form.

As we discussed in a prior article reviewing the proposed rule, the final rule provides greater flexibility for plan sponsors to revise cost-sharing amounts for grandfathered plans without causing them to lose their grandfathered status. Specifically, the rule permits a sponsor of a grandfathered group health plan to do the following without jeopardizing the plan’s grandfathered status:

  • For a high-deductible health plan (HDHP), to increase fixed-amount cost-sharing requirements, such as deductibles, to the extent necessary to maintain the plan’s status as an HDHP; and
  • To use the “premium adjustment percentage” published annually by HHS as an alternative method for measuring permitted increases in fixed-amount cost-sharing.

The final rule applies to grandfathered group health plans and grandfathered group health insurance coverage beginning on June 15, 2021.

If you have any questions about the final rule, please contact one of the attorneys in the Employee Benefits and Executive Compensation Practice Group at Bradley.