While most companies go through their annual renewal process in the fall, at Ambrose we are wrapping it up and heading into open enrollment for an Aug. 1 effective date. For us, as well as other employers with renewals that fall in the middle of the year, health care reform regulations haven't kicked in until now.
Effective Aug. 1, we will adopt the regulations that many employers already have adopted - dependent coverage to age 26, removal of lifetime maximums and preventive care coverage at 100%. During this renewal, we also had to make the decision on whether or not to retain grandfathered status.
We ended up electing not to keep our grandfathered status - being fully insured, there was no real compelling reason for us to maintain it, and the additional administrative requirements to ensure the status was maintained were not worth the status itself.
In our consideration, we took into account that grandfathered plans have to meet all of the following requirements in order to maintain their status:
* Including notices in any plan materials provided to members which certify the plan's grandfathered status.
* Maintaining documentation of plan materials and historical benefit design information, which need to be made available for review by plan participants and regulators.
* Ensuring that employer contribution rates are maintained within a range of 5% of the levels established as of March 23, 2010.
* Locking in coinsurance levels for the duration of the time the plan wishes to maintain grandfathered status.
* Maintaining copayments, deductibles and out-of-pocket maximums within the greater of $5 (copays only) or 15% of March 23, 2010, levels, with adjustment allowed for medical inflation.
* Not reducing benefits for the treatment or diagnosis of medical conditions.
* Not adding or decreasing annual limits.
We further considered what losing our grandfathered status would mean - and, being fully insured, realized that the main change, which deals with the appeals process, is handled by our carrier.
The other changes, we thought, were not bad things. The requirements that would not apply if we were to lose our grandfathered status are:
* Having an external review process that meets NAIC Uniform External Review Model Act or standards set by HHS. There was no impact to our plan, as our carrier handles appeals for us since we are fully insured.
* Allowing plan members to designate a child's pediatrician as the primary care provider and not requiring authorization or referral for a participating OB-GYN. We already had this in place, so again, there was no effect on our plan.
* Not discriminating in favor of highly compensated employees. As stated under Section 105(h), highly compensated employees cannot receive more favorable eligibility terms or benefits. While this one applies to us, we didn't think it was really a bad thing to have everyone treated equally.
* Covering certain preventive services without cost sharing. This one got us too, but with a focus on wellness, we didn't see it as a bad thing.
In the end, not retaining grandfathered status proved to be administratively easier than dealing with all the requirements to retain the status. I'm betting other fully insured clients feel the same.
Contributing Editor Christy Yaccarino, GBA, EHBA, HIPAAA, is a benefits manager for Ambrose Employer Group in New York City. She can be reached at firstname.lastname@example.org.
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