Grandfathered Health Plans

Grandfathered plans:

There has been a lot of buzz lately about grandfathered plans.  Initially, the plan was considered grandfatherable if there were no significant changes in the plan.  By being a grandfathered plan you could keep the current level of benefits but would miss out of the requirements of ObamaCare.  The rules are written so tight that basically almost any changes in benefits or contribution levels disallow grandfathering.  (Call us for a detailed analysis of your plan if you have any questions).  This was recently amended to at least allow you to change carriers if you kept the same basic coverage you currently have.  So we can shop for the same basic plan design with other carriers and the plan would continue to be grandfathered.  This especially matters if you currently have different benefit levels or corporate contributions for different groups of people in your organization.  (Remember the goal of socialism is to make everything the same and punish achievers and risk takers).  These benefit designs were to reward and Retain, those in your organization who performed at a higher levels or were more difficult to replace.  Yes, everyone in your organization is important and turn over hurts, but there are those positions or personalities that hurt more than others.  This so far seems to be the main reason to be concerned about grandfathered plans.  But the Lords and Ladies of Washington can change the rules whenever they choose.  So anything we evaluate today is solely based on today’s rules. 

There is a way around some of the onerous Obamcare that is coming your way sooner than you think.  (2014 is coming fast).  We can utilize partial self-funding plans, which follow the ERISA rules.  This will give us more options than the one size fits all that is coming your way eventually.  Partial self-funding is where you participate in some of the claims.  Normally this was for groups over 100 but there are several companies and I found a third company the other day that is reducing the group size as this market will open up to smaller groups.  Currently we can do this if you have 15 or more employees going on the plan.  There is also way if we structure it properly we can do this for a group of 5 employees. 

Traditionally we have tried to level off the rate increases by using gap plans as a supplement.  Now there are programs coming on line that will combine these for a three year cycle. The nice thing about this is they are integrated into the current health plan, so the gap plan claims are handled internally, instead of you having to make two filings, historically this has confused people, so many folks just did not file the gap claims.  This defeats the purpose of gap plans. 

More part time jobs are going to be cut.  So the very people the Wizards of Washington told you they wanted to help, are going to be losing hours soon.  If people work 25 hours or less, they are not part of the formula to determine if the plan discriminates or not.  So all those in the restaurant industry who have flex schedules but work over 25 hours will have their hours reduced so they do not affect the formula for companies that cover managers and full time staff. This industry has a high turnover of employees; it is not practical to offer coverage to the serving staff.  Eligibility for new enrollees into the medical plan can be extended to three years before they qualify.  So in some companies people will lose coverage they already have in order to maintain the carve out.  Again people lose coverage.  You can exclude employees who are younger than 25.  (But I thought we were trying to cover all those people?)
   
There are other areas that need to be looked at in review of this.  Again, please call us for a more detailed analysis.
More fun is coming our way.