Your Large-Employer Health Plan: Timeline for Compliance With Health Reform

Introduction: Who is the Timeline for?

The new health care law affects nearly all actors in the U.S. economy and is phased in over eight years. The Health Reform Timeline tells you how large employers (over 100 employees) must implement the new law for each year through 2018 — including all relevant provisions affecting coverage mandates and compensation-related taxes and reporting. 

Aren’t my plans grandfathered — and what does the grandfather do for me?

A plan in effect on March 23, 2010, is “grandfathered.” The grandfather covers all employees enrolled on March 23, 2010, their family members even if not yet enrolled, and all “new employees.” While not entirely clear, the preferred reading of “new employees” is any employee, no matter when hired, who first enrolls in the plan even after March 23, 2010. It is also unclear if and how a plan could lose its grandfathered status. (For a union plan, however, the grandfather expires when the last collective bargaining agreement relating to the coverage terminates.) Until guidance is issued, and absent major design changes, employers may assume that the grandfather covers any non-union plan existing on March 23, 2010.

A grandfathered plan is permanently exempt from some but not all coverage mandates. This Timeline lists mandates applicable to all plans, including grandfathered plans, and separately lists those that apply if the grandfather is lost or does not apply. Grandfathered plans are not exempt from the law’s new taxes and IRS reporting requirements.

Press reports say that coverage mandates become effective in six months. Is this right?

No. The earliest mandates are effective in the first plan year beginning six months after March 23, 2010 (date of enactment). For a calendar year plan, this is January 1, 2011. Accordingly, no coverage mandates apply before 2011 for a calendar year plan.