Everyone's been asking me how their current plans will be effected by this new legislation. They want to know what will happen to their plan if they have standard employees or union employees. This was covered in the new legislation, under Grandfathered plans.
The term Grandfathered applies to any plan in existence before the legislation was passed. Grandfathered plans DO NOT have to conform to the new law until the plans renewal date. So as long as the plan was in effect on March 23rd, 2010 it is not subject to the new rules until the plan renews. Any new employees will NOT alter the grandfathered status, so employer can feel free to hire new employees without the threat of penalties or restrictions.
Companies that have union employees where a Collective Bargaining Agreement is present are not subject to the new legislation (Due to the reconciled Bill) until the Agreement reaches its conclusion. Once the agreement is renegotiated, it will then have to be within compliance with the new legislation.
This helps to clear up a few misconceptions as to how businesses and unions will be effected by the new legislation. Next Week I'll cover what changes Grandfathered plans must make by Jan 1st, 2011 & Jan 1st, 2014.
If you have any questions you can reach me at (631) 338-9917.
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