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On November 15, 2010, the Department of Health & Human Services published an amendment to the interim final regulations on grandfathered health plans that provides prospective relief if a plan sponsor changes insurance carriers with respect to an insured plan. Provided the new policy does not include any changes described in the interim final regulations that would otherwise cause the benefit package to lose grandfathered status, the new policy will maintain its status as a grandfathered health plan. As a condition of relying on this rule, a group health plan that enters into a new policy must provide the new health insurance issuer (and the new health insurance issuer must require) documentation reflecting the plan's terms (including benefits, cost sharing, employer contributions, and annual limits) under the prior health coverage sufficient to determine whether any change that would otherwise result in revocation of grandfathered status under the interim final regulations. This documentation may include a copy of the policy or summary plan description.
For this purpose, the date the new coverage becomes effective is the operative date, not the date a contract for a new policy, certificate or contract of insurance is entered into. Therefore, if a plan sponsor entered into a new policy on August 1, 2010, effective January 1, 2011, the amendment to the interim final regulations would apply, provided the terms of the new policy did not contain any changes that would otherwise result in revocation of grandfathered status.
As a reminder, the following changes in design or cost result in loss of grandfathered status:
If you have any questions about whether a change in insurance carrier will result in loss of grandfathered health plan status under the Patient Protection and Affordable Care Act, please feel free to contact a member of the Employee Benefits group
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VCV Digital Technology announced that it plans to become a publicly traded company via a business combination with Fortune Rise Acquisition Corporation (NASDAQ: FRLAW, FRLA and FRLAW), a special purpose acquisition corporation.
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