A Florida employer wants its group health plan to retain grandfathered status. Which of the following changes would cause the plan to LOSE that status?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under the minimum benefit standards reflected in Chapter 627, Florida Statutes, one of the clearest ways a group health plan forfeits grandfathered status is by eliminating substantially all benefits needed to diagnose or treat a particular condition, because the plan is then no longer the coverage the enrollees originally had. Other major forfeiture triggers include significant increases in cost-sharing or employee contributions. By contrast, ordinary renewal, adding a new voluntary benefit, and enrolling new employees in the same plan do not by themselves destroy grandfathered status.
Why the other options are wrong
- A) Simple renewal with no reduction in benefits and no added cost-sharing preserves grandfathered status rather than destroying it.
- B) Adding a new voluntary benefit does not cut existing coverage, so it does not forfeit the plan's grandfathered status.
- D) A grandfathered group plan may continue to enroll newly hired employees; the status attaches to the plan, not to a closed list of enrollees.
Memory hook
Cut benefits, lose status: taking away coverage kills the grandfather.