Grandfathered Health Plans

On June 14 regulations were put forth explaining how health plans can be grandfathered. It appears that the regulations as written will mean very few businesses will be able to keep their current health plans. My personal comment is that this is very disappointing.

Plans in effect on March 23, 2010 and plans maintained pursuant to one or more collective bargaining agreements ratified before March 23, 2010, are “grandfathered” in certain respects.

For individuals and small business, who are more likely to significantly change the plan design (such as increase out of pocket expense or copayments) and/or change carriers, will lose their “grandfathered” status.

In order for a plan to not lose “grandfathered” status, it cannot do any of the things below:

Cannot Significantly Cut or Reduce Benefits.

Cannot Raise Co-Insurance Charges.

Cannot Significantly Raise Co-Payment Charges.

Cannot Significantly Raise Deductibles.

Cannot Significantly Lower Employer Contributions.

Cannot Add or Tighten an Annual Limit on What the Insurer Pays.

Cannot Change Insurance Companies.

There will be thousands of regulations written in the coming years and many will define what the health bill really is.


Scott Hauge
President
Small Business California
2311 Taravel Street
San Francisco, CA 94116
415-680-2188
shauge@cal-insure.com