Written by Ellie Tonder, VP of Operations
As an employee benefits consultant, I am asked by our fully insured clients, almost daily, about whether or not they should maintain their “grandfathered” status. My response is usually, “If you can afford to remain grandfathered then, by all means, let’s keep it that way!” The regulations seem to be amended and modified often. The most surprising recent change states that companies can maintain grandfathered status even if they changed carriers. A recent article from Employee Benefit Advisor explains, “The decision to elect grandfather status isn’t simple. It consists of numerous ‘moving parts,’ strict standards, and risks and rewards that remain unclear.”
Additionally, “Grandfathered plans are exempt from some ACA requirements, but not all of them.” Are you confused yet? Fortunately, the insurance carriers have done most of the legwork for our clients, eliminating many of the headaches since all are now in compliance. They have complied with:
- Removing lifetime maximums
- Allowing dependents to remain on their parents’ plans up to age 26
- Removing co-pays from preventive visits, etc.
Now that we are over those major hurdles and a year into this (Healthcare Reform/Affordable Care Act), I feel more comfortable asking our fully insured benefits clients the most important items to consider in simple, easy to understand language. The questions I ask are as follows:
- Do you plan to increase your percentage-based cost sharing with your employees for your new plan year? If so, then by how much?
- Do you plan to eliminate a benefit?
- Do you plan to increase any fixed co-payment amounts (e.g., office or prescription co-pays) by more than $5?
- Do you plan to decrease your contribution rate, based on the cost of coverage, towards the cost of any tier of coverage by more than 5% below the contribution rate?
If they answer yes to any of the questions above, they will lose their grandfathered status. If they answer no, they can remain grandfathered for the new plan year.
Are you fully insured or self-funded? What are your thoughts? We’d like to hear from you.