… and a few of our carriers are going to let you!

You may have heard about grandfathering and how it relates to your group health insurance plan, but have you heard that your plan may now be grandmothered?

Many businesses contracted under fully-insured group health plans seized the opportunity renew their contract(s) in December 2013 to avoid the sharp premium increase that Healthcare Reform was expected to impose as a result of the community rate reforms mandated for the small group market and under the Affordable Care Act (ACA).  For most, opting for the early renewal simply meant postponing the inevitable.

Recently, current Administration announced that once again insurers were going to be allowed to extend the delay of community rate reforms – and into 2015.  Although the decision was left to the States and insurance carriers to make, a couple of the more popular fully-insured carriers in NE Indiana have announced they will be doing just that.  Both Anthem BC/BS and PHP have opted to release “grandmothered” renewals for their existing groups currently active under 2013 contracts.  (Both chose not to extend the opportunity to Individual policyholders.)  There is a little hitch in the wagon, however.

Employers with 2013 contracts scheduled to renew beginning as early as May 1, 2013, can expect to receive a grandmothered renewal offer.  The offer, however, will be limited to current benefit plan(s) only.  In other words, no putting a band-aid on the increase by raising deductibles.  If you want to change the benefit plan – you must transition to the ACA side of the business.  And this equates to community rates for your group.

Here at Health Insurance Shop, we visited with each and every one of our small group clients last Fall to discuss the pros and cons of moving into an ACA compatible plan, and/or opting to accept the December renewal offer.  This year, we expect that the majority of our small group plans will agree that grandmothering will be the most affordable option – but do expect a handful could find that transitioning to the ACA side might make more sense.  Depending upon what their renewal offer/increase is.  Either way, we will be prepared to make recommendations for you to consider.

What Are Community Rates?

Did you know?  Rates are the rates, are the rates, are the rates.  That is basically what community rates mean.  The Affordable Care Act states that small group health plan rates can no longer discriminate based upon factors like health risk, SIC, etc.  Instead, rates may only be based upon a few factors:

  • where an employer is located (zip code);
  • the age of the individual covered
    • employee
    • spouse
    • dependent children under age 21
    • dependent children 21 and over
  • whether or not the covered individual uses tobacco products
  • how an individual is enrolled
    • single
    • family

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