The Patient Protection and Affordable Care Act ( P.L. 111-148 , ACA), as amended, includes provisions for the grandfathering of existing health insurance plans. Given that most Americans had private health insurance coverage on the date of enactment of ACA, most Americans' health coverage was affected by the grandfathering provisions. This report describes grandfathered plans and summarizes the ACA insurance reforms that will affect such plans, including the requirements concerning medical loss ratios, dependent coverage, and preexisting health condition coverage. It also discusses issues addressed during the regulation promulgation process, including the possible loss of grandfathering status. In addition, the report describes analysis of the potential impact of the grandfathering regulations on existing health plans, and describes a sampling of comments submitted during the public comment period. A grandfathered health plan is an existing group health plan or health insurance coverage (including coverage from the individual health insurance market) in which a person was enrolled on the date of ACA's enactment. Therefore, as long as a person was enrolled in a health insurance plan on March 23, 2010, that plan has been grandfathered. Current enrollees in grandfathered health plans are allowed to re-enroll in that plan, even if renewal occurs after the date of ACA enactment. Family members are allowed to enroll in the grandfathered plan, if such enrollment is permitted under the terms of the plan in effect on the date of enactment. For grandfathered group plans, new employees (and their families) may enroll in such plans. Grandfathered health plans are exempt from the majority of new insurance reforms under ACA. However, grandfathered plans are subject to a handful of requirements with different effective dates. Grandfathered health plans must comply, for plan years beginning on or after the date of enactment (March 23, 2010), with the following reforms: Development of uniform explanation of coverage documents. Reporting of medical loss ratio and other financial information to the Secretary of Health and Human Services (the Secretary), and offering of premium rebates to enrollees if the plan did not meet specified medical loss ratios (rebate offers begin no later than January 1, 2011). The insurance reforms to which grandfathered health plans must comply for plan years beginning six months on or after date of enactment (September 23, 2010) are the following: Prohibition on lifetime limits on essential health benefits. Prohibition on health plan rescissions, except in cases of fraud or intentional misrepresentation of material fact. Requirement to extend dependent coverage to children under age 26. Prior to 2014, a grandfathered group plan is not required to make available dependent coverage to a child who is eligible for employment-based health benefits through his or her own employer. Grandfathered health plans must comply, for plan years beginning on or after January 1, 2014 , with the prohibition on waiting periods that are greater than 90 days. Grandfathered plans providing group coverage will be required to comply with the following reforms: Prohibition on annual limits on essential health benefits, effective for plan years beginning on or after 2014. Prior to 2014, only "restricted" annual limits on essential health benefits are allowed, effective for plan years beginning on or after six months from date of enactment (September 23, 2010). Prohibition on coverage exclusions for preexisting health conditions. For most enrollees, this provision will become effective for plan years beginning on or after January 1, 2014. However, for children under age 19, this provision will become effective for plan years beginning on or after six months from date of enactment (September 23, 2010). The individual mandate requires most individuals to have health insurance coverage beginning in 2014, or potentially pay a penalty for noncompliance. Individuals will be required to maintain "minimum essential coverage" for themselves and their dependents. ACA defines minimum essential coverage to include many different insurance options, including grandfathered plans. On a practical level, the question concerning grandfathered plans and complying with the individual mandate is relevant only to plans in the individual market. A person enrolled in any employer plan, whether the plan has been grandfathered or is new, will have met the individual mandate. ACA is silent on the question about which plan changes would lead to loss of grandfathered status. The statutory language does not specify whether changes to covered benefits, cost-sharing requirements, actuarial value, or other plan features would be allowed under a grandfathered plan (some, but not all, of these plan features are addressed in the regulation on grandfathered plans, as discussed below). Also, ACA does not address instances when there are changes related to the insurance carrier offering the plan (e.g., new corporate owner), so it is not clear from the statutory language whether organizational changes would make grandfathered plans into new plans (a change in issuer is addressed in the regulation, and later in an amendment to the regulation). The only scenario that the statute specifies loss of grandfathered status is in the case of coverage provided under one or more collective bargaining agreements (CBAs). Health insurance provided under CBAs that were in effect on the date of enactment is grandfathered until the termination date of the last agreement. Any amendment made to such coverage, solely for the purpose of conforming with ACA requirements, will cause neither termination of an agreement nor loss of grandfathered status. On June 17, 2010, the Departments of Health and Human Services, Labor, and Treasury ("Departments") issued interim final rules with request for comments regarding grandfathered plans. The Departments identified certain changes to benefits, cost-sharing, employer contributions, and access to coverage that would cause the loss of grandfathered status. The rules also clarified the loss of grandfathered status in either of the following instances: a plan did not have continuous enrollment since enactment (does not need to be the same enrollee), and termination of an existing collective bargaining agreement under which grandfathered health coverage was provided. In addition, the rules include transitional rules, a statement regarding federal enforcement, and an estimate of the potential impact of grandfathering rules on group and individual health plans. Comments on the interim final rules were due August 16, 2010. Overall, the Departments have existing authority (under three relevant federal statutes ) to promulgate regulations with respect to health insurance market reforms, and issue amendments to such regulations. Moreover, the Departments reserved the right to issue administrative guidance (not in the form of regulation) to "clarify or interpret the rules contained in these interim final regulations for maintaining grandfathered health plan status." Nevertheless, the Departments did not specify an exact timeline for either amendments to the interim final rules or administrative guidance. The interim final rules identified certain changes that would cause a plan to lose grandfathered status. Some of the changes that would cause loss of grandfathered status relate to covered benefits, cost-sharing requirements, and employer contribution rates: "Elimination of all or substantially all benefits to diagnose or treat a particular condition"; "Any increase … in a percentage cost-sharing requirement (such as an individual's coinsurance requirement)"; "Any increase in a fixed-amount cost-sharing requirement other than a copayment (for example, deductible) … [that] exceeds the maximum percentage increase" (defined as medical inflation + 15%); "Any increase in a fixed-amount copayment … [that] exceeds the greater of: (A) An amount equal to $5 increased by medical inflation … (that is, $5 times medical inflation, plus $5), or, (B) The maximum percentage increase"; Any of the following changes regarding an employer's contribution towards premiums: (A) "Employer or employee organization decreases its contribution rate based on cost of coverage … by more than 5 percentage points below the contribution rate for the coverage period that includes March 23, 2010" or (B) "Employer or employee organization decreases its contribution rate based on a formula … by more than 5 percent below the contribution rate for the coverage period that includes March 23, 2010"; and Any of the following changes regarding annual dollar limits: (A) "A group health plan, or group health insurance coverage, that, on March 23, 2010, did not impose an overall annual or lifetime limit … [later] imposes an overall annual limit"; (B) "A group health plan, or group health insurance coverage, that, on March 23, 2010, imposed an overall lifetime limit … but no overall annual limit … [later] adopts an overall annual limit at a dollar value that is lower than the dollar value of the lifetime limit on March 23, 2010"; or (C) "A group health plan, or group health insurance coverage, that, on March 23, 2010, imposed an overall annual limit … [later] decreases the dollar value of the annual limit…." The regulation also included "anti-abuse" rules that specified instances in which changes to employee access to coverage would cause loss of grandfathered status. The rules specified that plans or coverage would cease to be grandfathered: "If the principal purpose of a merger, acquisition, or similar business restructuring is to cover new individuals under a grandfathered health plan"; or If the following changes to the eligibility criteria were made: (A) "Employees are transferred into the plan or health insurance coverage (the transferee plan) from a plan under which employees were covered on March 23, 2010 (the transferor plan)"; (B) "Treating the transferee plan as if it were an amendment of the transferor plan"; and C) "There was no bona fide employment-based reason to transfer the employees…." (Changing the cost or terms of coverage does not constitute a bona fide employment-based reason.) The regulation provides some flexibility in allowing changes to be made to the terms of a plan or coverage after enactment which do not cause loss of grandfathered status.