Plan sponsors of insured medical plans that are not grandfathered will be relieved to know that the Internal Revenue Service (IRS) issued a notice delaying the compliance date for the new nondiscrimination requirements imposed by the Patient Protection and Affordable Care Act and the related Health Care and Education Reconciliation Act of 2010 (together, the Health Care Reform Law). Under the Health Care Reform Law, insured medical plans that lose grandfathered status are required to be nondiscriminatory under rules “similar to” the rules that apply to self-insured medical plans (the 105(h) Rules, named after the section of the tax code containing those rules). This requirement was supposed to be effective for plan years beginning on or after September 23, 2010. However, the IRS notice delays the effective date of this requirement until after the IRS issues guidance on how plans should apply the new nondiscrimination rules. Until that time, insured plans will not be sanctioned for failing to comply with the nondiscrimination rules.

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Source: Health Plans: What's Next? Drinker Biddle's Health Care Reform Update
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