Final Rule Allows Greater Flexibility for Grandfathered Plans Under the ACA


On December 15, 2020, the Departments of Labor, Health and Human Services and the Treasury (Departments) published a final rule that provides greater flexibility for grandfathered plans under the Affordable Care Act (ACA).


A grandfathered plan is a group health plan or health insurance coverage that was in existence on March 23, 2010 (the date the ACA was passed), that has not made certain prohibited changes to lose its grandfather status. Grandfathered plans are exempt from certain ACA requirements.


The final rule:

  • Allows grandfathered high deductible health plan (HDHP) coverage to increase fixed-amount cost-sharing requirements, such as deductibles, to the extent

  • necessary to maintain its status as an HDHP without losing grandfather status; and

  • Provides an alternative method of measuring permitted increases in fixed-amount cost sharing that is intended to allow plans and issuers to better account for changes in the costs of health coverage over time.


This additional flexibility may allow additional plans to maintain their grandfather status, despite certain changes being made to the plan.

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