Are employer-sponsored group health plans covering retirees subject to health care reform?

Maybe.  If both active employees and retirees are combined in one plan, then health care reform applies, even to the retiree portion of the plan.  However, plans that are separate and do not include any active employees – so called “retiree-only” plans – may avoid government enforcement of health care reform.  Before health care reform, retiree-only plans were exempt from the health care requirements that applied to health plans for active employees.  Recently, the applicable government agencies stated that the exemption is not inconsistent with health care reform.  They also stated that the agencies will not take enforcement action against retiree-only plans for compliance with health care reform.  That guidance was in the preamble to the rules about grandfathered status, but not in any formal regulations.

Please note that while the agency interpretation and enforcement of the retiree-only exemption is helpful, a retiree or retiree dependent could still sue a health plan to enforce health care reform.  In such a lawsuit, courts may consider the agency’s views, but are not bound by them.

Today’s post was contributed by Maureen Maly and Megan Hladilek.

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