Wondering what “grandfather” or “grandfathered plan ” means in the health care reform law.

If an employer keeps the same coverage it had on March 23, 2010 – the date the law took effect – the plan may be considered a “grandfathered” plan.

This means the plan may be exempt from some of the requirements of the health care reform law. However, certain changes must be made to all plans, whether they’re grandfathered or not.

The following changes must be made to all plans:

* No lifetime benefit maximum limits

* Dependent coverage for adult children up to age 26

* No annual limits on certain types of benefits

* No pre-existing conditions exclusions for children under age 19

If certain changes in coverage are made after the law’s effective date, the plan will not be a grandfathered plan.

This means the plan will also see the following changes:

* 100% coverage for preventive care in network.

* No prior authorization for emergency services or higher cost-sharing for out-of-network emergency services

* Coverage of routine patient costs for clinical trials of life-threatening diseases, starting in 2014

How do you loose your grandfather status ?

The following changes to a plan will result in the loss of a grandfathered status:

* Eliminating all (or substantially all) benefits to diagnose or treat a particular condition

* Increasing coinsurance by any amount above the level set on March 23, 2010

* Increasing fixed amount cost sharing (other than copays) more than the sum of medical inflation plus 15 percentage points from the level of March 23, 2010

* Increasing copays by an amount that exceeds the greater

of (1) a total percentage (measured from March 23, 2010)

that is more than the sum of medical inflation plus 15 percentage points, or (2) $5 times medical inflation,

* Reducing employer or employee organization contributions based on the cost of coverage or a formula by more than 5 percentage points below the contribution rate on March 23, 2010

* Reducing an overall annual dollar limit or adding a new overall annual dollar limit, compared  with what was in effect on March 23, 2010

* Ensuring that consumers switch to a grandfathered plan that, compared with the current plan, has fewer benefits or higher cost sharing as a means of avoiding new consumer protections.

* Buying or merging with another plan to avoid complying with the health care reform law