The ACA allows small employers to self-insure or maintain grandfathered policies – but a new RAND analysis shows that most small employers won’t self-insure because it exposes them to too much financial risk if employee medical expenses increase unexpectedly. In addition, federal agencies estimate that small employers won’t be able to meet the requirements to grandfather existing plans after 2014. However, if the regulations were changed to allow more employers to maintain grandfathered plans, the study says premiums would increase significantly and reduce enrollment through the Small Business Health Options Program exchanges by as much as 50% – which would have a negative impact on the price of plans in the SHOP exchanges as a result of fewer, more unhealthy populations comprising the bulk of exchange enrollments.

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Visit Extend Health — the nation’s largest private Medicare exchange.

Kaiser recently released the results of its thirteenth annual Kaiser Family Foundation/Health Research & Educational Trust (HRET) Employer Health Benefits survey. Each year they conduct a survey of 3,184 “nonfederal private and public employers with three or more workers.”

This survey looks at many employer-sponsored health coverage trends including premiums, employee contributions, cost-sharing and much more. New for 2011 it also includes, “the percent of firms with grandfathered health plans, changes in benefits for preventive care, enrollment of adult children due to the new health reform law, and the use of stoploss coverage by firms with self-funded plans.”

The findings in this year’s survey show that the percentage of large employers (those with 200 or more workers) offering retiree health benefits in 2011 is 26%, which is the same percentage that was offered in 2010. The steep decline in employers offering retiree benefits seems to have moderated in recent years, and reached a plateau at least for the time being.

Here are a few key findings:

  • 26% of large employers are offering retiree Health benefits – no change from last year.
  • 72% of all firms have at least one grandfathered plan under ACA.
  • 65% of small businesses haven’t checked to see if they qualify for ACA small employer tax credits.
  • 56% of covered workers are in grandfathered plans.

You can access the survey online at You read the report online, or down load the full report, a summary, and presentation slides as well as various other documents and supplements.

Visit Extend Health — the nation’s largest private Medicare exchange.

Employer group insurance premiums for family coverage grew 9% this year (triple the rate from 2010) and 8% for single coverage, according the 13th annual Employer Health Benefits survey conducted by Kaiser Family Foundation. Despite the increases, employers held the percentages workers paid toward premiums to about the same as they paid in 2010 (18% for single coverage and 28% for family coverage).

So what caused the sharp increases in the cost of health premiums this year? Since many have voiced concerns about the impact health care reform would have on costs, fingers will naturally point there first, but the study points out that it was not the main contributor. The research shows that provisions of the new health care law that were in effect only had about a 1.5 to 2 percent impact on the 9% increase. According KHN, “Many factors drive premium growth, the main one being actual spending on medical care, including jumps in prices charged by hospitals and doctors and growing use of expensive new drugs and technologies.”

Learn more about the results of this study in this article on Kaiser Health News. Download a summary or the full report.

Visit Extend Health — the nation’s largest private Medicare exchange.

After reviewing public comments, HHS has issued an amendment to the grandfathered plan rules in the PPACA. Companies can now change insurance companies and retain grandfathered status, as long as they keep employee costs and benefits “substantially” the same. Previously, the only change allowed was to third-party administrator, but after review the government concluded that not allowing employers to change insurance companies gave too much power to the carriers to increase rates on their corporate customers. This welcome change gives employers a little more breathing room to find the best value for their employee benefits without losing grandfathered status.

EBN has a pretty good summary of the new ruling.  You can find the actual ruling here; scroll down until you see this section, where you can dowload a .pdf of the ruling.



Group Health Plans and Health Insurance Coverage:

Status as a Grandfathered Health Plan Under the Patient Protection and Affordable Care Act

This entry is the first of several written by Avalere Health for the Extend Health client base. We will post them here over the coming weeks.

Grandfathered Health Plans and Reform:  What You Need To Know About Benefit Plan Changes Under the Affordable Care Act

 By Carly Kelly and Kelly Brantley
Avalere Health

The Affordable Care Act has created sweeping changes across healthcare.  Many of the changes impact the fundamentals of health insurance, and affect anyone that manages the creation and administration of employee benefits. 

As you may know, certain “grandfathered” health plans are exempt from some of the new requirements in the Affordable Care Act (ACA).  The Department of Health and Human Services (HHS) recently released interim regulations to clarify how a health plan can qualify for—or lose— grandfathered status. 

In the preamble to the interim regulations, HHS encourages States not to apply the ACA requirements to retiree-only plans.  Even with this clarification,  the grandfathered health plan regulations are likely to raise questions from employer groups that offer both retiree and non-retiree coverage. Read the rest of this entry »