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When it comes to healthcare reform, it pays to be grandfathered and it pays to be under 26 and on your parent’s group policy.

By  Scott Sinder and Rhonda Bolton

In the first five weeks after passage of the landmark healthcare reform bill, we presented 25 seminars to agents, brokers and their clients, giving an overview of the legislation and helping them assess what changes are in store. We also generated a list of frequently asked questions and responded to more than 150 inquiries from Council members and their clients.

The two most frequently asked questions concern the definition of “grandfathered” plans and coverage of dependent children.

A grandfathered plan is any plan in existence on March 23, the date the law was enacted. The legislation provides no more detail distinguishing a grandfathered plan from a “new” plan. The advantage of being grandfathered is that these plans will not be obligated to implement a discrete list of plan design elements. Most are described in only general terms in the legislation, so the Department of Health & Human Services will be developing regulations to flesh out precisely what new plans will be required to do.

In the future, existing grandfathered plans are excluded from:

· Mandated offering of free preventive services

· Out-of-pocket limitations (these are equivalent to the high-deductible health plan out-of-pocket limits for HSAs)

· Primary care physician designation right (each plan participant will have the right to designate an in-network primary care physician of their choice)

· Clinical trial participation right (each plan participant will have the right to receive covered services through approved clinical trials)

· Mandatory appeals process rights

· Essential benefits/minimum plan value (Applies only to small-group—fewer than 100 employees—and individual plans. This is the standard “bronze” plan that HHS will develop with a standard set of benefits and premiums.)

· Community rating/no medical underwriting (for small-group—fewer than 100 employees—and individual plans, premiums may not be based on information related to health or medical claims but instead will be set at a pool level)

· Premium increase reviews (does not apply to self-insured plans)

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