Filed under: Dependent Children, Groups (100+ Employees), Groups (2-50 Employees), Groups (51-99 Employees), Individuals and Families. Tagged as: grandfathered plans, health insurance reform.
During the health reform debate, President Obama stated “if you like your health plan, you can keep it.” However, you could be in jeopardy of keeping the plan as you now know it. Grandfathered plans are exempt from implementing certain provisions that non-grandfathered plans are required to implement, and in turn can keep the cost of insurance down, as discussed in Fact Sheet #1. Plans will lose their grandfathered status if they choose to make significant changes that reduce benefits or increase costs to consumers. To maintain grandfathered status, plans:
- Cannot Change Insurance Companies. (repealed 11/15/2010 and addressed on 11/29/2010 in blog post)
- Cannot Significantly Lower Employer Contributions.
- Cannot Significantly Raise Deductibles or Out-of-pockets.
- Cannot Raise Co-Insurance Charges.
- Cannot Significantly Raise Co-Payment Charges.
- Cannot Significantly Cut or Reduce Benefits.
- Cannot Add or Tighten an Annual Limit on What the Insurer Pays.
Details of the above changes are discussed in Fact Sheet #2.
What does this mean to you?
It is estimated, according to www.healthreform.gov, that by 2013 only 55% of large employer plans and 34% of small employer plans will remain grandfathered. Statistics for individual health plans are even lower as roughly 40% of plans change within a year. So, how realistic is the assumption that if you like your heatlh plan, you can keep it? Also, the loss of grandfathered status will require the plan to implement costly required provisions.