The Trump administration finalized a rule allowing employers to make changes in their health plans without losing their grandfather status exempting them from certain Obamacare provisions.
The rule, posted on December 15, allows employers to increase employees’ health insurance deductibles, as many employers are under severe financial stress from the government lockdowns imposed in response to the COVID-19 pandemic.
Under the Affordable Care Act (ACA), employers were forced to comply with the law’s coverage requirements, but the law allowed certain health plans that existed before enactment to maintain their then-current coverage, except for a provision that plans must cover those with preexisting conditions. The “grandfather” provision was originally supposed to phase out but in 2017, President Donald Trump signed an executive order delaying the date when all plans would have to comply with the ACA.
The new rule shores up that order by allowing more companies to increase deductibles without having to be fully ACA compliant. Higher deductible plans allow employees to use a health savings account (HSAs).
“The final rule promotes choice and competition in health coverage,” said U.S. Secretary of Labor Eugene Scalia in a news release. “The flexibility the final rule provides allows employers to continue to provide American workers with the health coverage that they prefer during this critical time.”
“Today’s final rule equips many employers with an important tool to respond to rising health care costs,” said Acting Assistant Secretary for the Department of Labor Jeanne Klinefelter Wilson. “Employers are now better positioned to continue to offer affordable health care options that best meet their employees’ needs.”
“Grandfathered Group Health Plans and Grandfathers Group Health Insurance Coverage,” Internal Revenue Service, Employees Benefits Security Administration, Health and Human Services, Department of Labor, Centers for Medicare & Medicaid Services, December 15, 2020: https://www.federalregister.gov/documents/2020/12/15/2020-27498/grandfathered-group-health-plans-and-grandfathered-group-health-insurance-coverage