Grandfather Status and HRAs

Question from Broker:

An employer provides a CDHP with a deductible of 2000/4000 (S/F) along with a Health Reimbursement Account of 1000/2000 (S/F).
If the employer reduces the HRA to 500/1000 and all other components of the plan remain unchanged will the plan lose it grandfathered status?
The language for the “Fixed Amount Cost Sharing Requirement” appears to be silent on this subject since it addresses deductibles and out-of pocket maximum of the “plan”.

Answer from Attorney:

Ric

We don’t think there is a clear answer to this.  It goes to what is considered part of the same benefit package option.  Clearly this change blows up grandfathering for the HRA – but what is unclear is whether this is a part of the medical plan given that medical plan elections are interconnected with plan benefits under the HRA. 

I will let you know if we learn of any guidance on this.  Absent any, there would be risk in relying on grandfathering for the medical benefit under these facts.  If grandfathering is a big deal, the employer may want to wait for future guidance before implementing this change.

Todd

Todd W. Martin
Reinhart Boerner Van Deuren s.c.
22 East Mifflin Street, Suite 600 | Madison, WI 53703
Office: 608-229-2244 | Cell: 608-219-7196 | Fax: 608-229-2100
tmartin@reinhartlaw.com  | bio | vCard | reinhartlaw.com

Legal Secretary: Laura Taggart | 608-229-2253 | ltaggart@reinhartlaw.com

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