UPDATE: The Obama Administration has announced a press conference to discuss the regulations at 2 PM today. Here is an administration fact sheet.
The Obama administration is expected today to publish its draft regulations for the treatment of “grandfathered” employer-sponsored health care plans, or those employer plans that were in existence before the passage of the Patient Protections and Affordable Care Act. The expected regulations answer what, exactly, allows a health care plan to be exempt from many of the new health care bill’s requirements because of its grandfathered status.
The regulations, seen here, allow an existing plan to remain exempt from many of the new health care regulations unless the plan: (1) eliminates benefits to “diagnose or treat a particular condition”, (2) increases deductibles or co-pays by more than the rate of medical inflation plus 15 percent and (3) decreases cost sharing by more than five percent [for example, decreasing an employer's contribution to an employee's plan from 60% to 50%]. White House economic officials estimate that about half of the current employer plans will lose grandfathered status by 2013.
The regulations are designed to allow employer sponsored plans to increase their benefits and coverage without losing their exemptions. However, some organizations are concerned that the strict requirements on raising costs or cutting benefits would contradict the administration’s pledge of allowing people to keep their insurance if they like it.
“What we are getting here is a clear indication that most plans will have to change,” said James Gelfand, health policy director for the U.S. Chamber of Commerce in a recent news article. “From an employer’s point of view that’s a bad thing. These changes, whether or not they’re good for consumers, are most certainly accompanied by a cost.”
While grandfathered plans are exempt from many of the new requirements the president signed into law on March 23, some all plans must follow. All health insurance plans are prohibited from denying coverage due to health condition nor can they impose lifetime limits on benefits.
