Common use of Grandfathered Status Under Federal Law Clause in Contracts

Grandfathered Status Under Federal Law. Group health plans in effect on March 23, 2010 may be eligible for grandfathered status pursuant to Section 1251 of the Patient Protection and Affordable Care Act, as modified by Section 2301 of the Health Care Reconciliation and Education Act of 2010 (PPACA), and 45 C.F.R. § 147.140. Group health plans that qualify for grandfathered status do not need to meet all of the requirements applicable to non- grandfathered health plans under PPACA. The changes to a group health plan that may affect its grandfathered status include, but are not limited to, the elimination of all or substantially all benefits to diagnose or treat a particular condition, an increase to the percentage of cost-sharing requirement applicable to benefits under the policy, an increase to a fixed amount cost-sharing requirement applicable to benefits under the plan (beyond what is permitted by law for retaining grandfathered status), or the creation or modification of an annual or lifetime limit (beyond what is permitted by law for retaining grandfathered status). There are also other factors of which Blue Cross and Blue Shield may not be aware, that may affect a group health plan’s grandfathered status. For example, changes by an employer the contribution rates for the group health plan’s subscribers may result in the loss of grandfathered status for the group health plan. You must immediately notify Blue Cross and Blue Shield if you make any change to your contribution rates during the policy year. The requirements for maintaining the grandfathered status of a group health plan are subject to change as new standards and/or new interpretations of existing requirements are issued by federal or state agencies. In the event you have 100 or more employees enrolled in Blue Cross and Blue Shield benefits plans, Blue Cross and Blue Shield will, upon receipt of necessary documentation, administer your plan design(s) as having grandfathered status. You are responsible for determining if your group health plan(s) qualify for grandfathered status. In the event that you inform Blue Cross and Blue Shield that you consider your group health plan(s) to be grandfathered group health plan(s), you represent and warrant that (i) the group health plan(s) were in effect on March 23, 2010 and (ii) you have determined that the group health plan(s) are eligible for grandfathered status. You must specify in writing the specific plan designs to be grandfathered. You are solely responsible for compliance with the disclosure and document retention requirements applicable to grandfathered plans under 45 C.F.R. § 147.140. Blue Cross and Blue Shield makes no representation or warranty regarding the past, present, or future grandfathered status of your group health plan(s) or that your group health plan(s) are eligible for grandfathered status. In addition, to the extent that your group health plan(s) are eligible for grandfathered status, Blue Cross and Blue Shield makes no representation or warranty that this status will be retained during the current plan year or any future renewal period. Blue Cross and Blue Shield is not responsible and shall not be liable for any claims, costs, liabilities, losses, penalties, damages or other expenses of any kind that, directly or indirectly, arise from or relate to your group health plan(s)’ past, present and future grandfathered status, lack thereof, or any changes regarding the group health plan’s grandfathered status, including, but not limited to, any representation made by any employee, broker, agent, or independent contractor of Blue Cross and Blue Shield regarding the group health plan’s grandfathered status.