Kathleen Sebelius
ASAE submitted comments Tuesday on new regulations for existing health insurance plans that want to retain their “grandfathered” status. View the comments and the regulations.
Announced by Health and Human Services (HHS) Secretary Kathleen Sebelius, the new rules allow plans that existed on or before March 23, 2010 – the day the health care reform act was signed into law – to make “routine and modest adjustments” to co-payments, deductibles and employer contributions without forfeiting grandfather status. Plans will lose their grandfather status, however, if they choose to significantly cut benefits or increase out-of-pocket spending for consumers.
ASAE is concerned that the formula for determining significant cuts in benefits or increases in spending could force associations experiencing unexpected or routine premium increases to lose their grandfathered status and face a series of new requirements for their plans. As stated in the letter, for many associations these changes would mean drastic rate increases without the benefit of small employer health care exchanges, which go into effect in 2014. ASAE asked that the administration consider an exemption for small to medium employers until 2014 as long as they do not reduce the per-employee amount they pay for insurance, as well as permit these employers to change insurance carriers as long as they keep the per-employee amount the same.
Your association may submit comments on this regulation before August 16 at this site. You may also use ASAE comments as a guide for your own.
Regardless of grandfather status, all health plans must provide certain benefits to customers for plan years starting on or after Sept. 23, 2010, including a ban on lifetime limits for coverage, a ban on rescissions of coverage when people get sick, and an extension of coverage to children under 26 years old who are on their parents’ insurance. Plans that lose their grandfathered status would be required to provide additional consumer protections, including preventive care coverage with no cost sharing and guaranteed access to OB-GYNs and pediatricians without a referral from a primary care provider.
