Grandfathered Plan Qualifications Checklist for Group Health Plans

Will your plan qualify for grandfathered status?

The following checklist may help you analyze if each benefits package within your group
plan may remain qualified for grandfathered status.

Compared to your plan in effect on 3/23/2010, will there be:

  • Zero enrollees in the plan during any month?
  • A decrease of more than 5 percentage points in your contribution
    rate for coverage or any tier of coverage? 
  • An elimination of a benefit to diagnose or treat a particular condition? 
  • Any increase in a percentage of member cost-sharing requirement such
    as coinsurance?
  • Any increase in a fixed copayment by more than the greater of CPI1
    plus 15 percentage points or $5?*
  • An increase in deductibles or out-of-pocket limits by more than CPI
    plus 15 percentage points?
  • An addition or decrease of an annual limit (except to replace an overall
    lifetime limit)?2
  • A business restructuring in order to avoid loss of grandfathered status?

If you answered “Yes” to any of these questions, there is a good chance that your plan will not be grandfathered or that you will not benefit from seeking grandfathered status. This basic checklist does not list all of the actions that may defeat grandfathered status, so you will want to review this issue carefully if you wish to maintain grandfathered status. Among other requirements, grandfathered plans must contain a specific notice in plan documents to retain grandfathered status.

To learn more about grandfathering, access the following links posted on the Department of Labor’s Employee Benefits Security Administration website:
Interim Final RegulationTable on Applicability of Provisions to Grandfathered PlansModel disclosure language.

*Adjusted for inflation.
1 Based on the overall medical care component of the Consumer Price Index for All Urban
Consumers, unadjusted (CPI), published by the Department of Labor using the 1982 –
1984 base of 100.
2 Permitted only if the plan did not already have an annual limit on March 23, 2010, and the
new annual limit must not be lower than the prior lifetime limit and is subject to regulatory

This summary is provided for informational purposes only. This summary should not be
construed as, or relied upon, as legal or any other advice. Employers should consult with their
own legal counsel for a comprehensive explanation of the rules and the proper application
of these rules to their particular situation.