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Grandmother Joins Grandfather in Health Care Plans Decisions

Grandmothering Extends Current Health Care Plans for Small Business

"Grandmothering" is the term the federal government now uses to extend non-Affordable Care Act policies until 2016. This alternative applies to individuals and companies with fewer than 50 employees.

The United States Department of Health and Human Services issued the, “Extension of Transitional Policy” in March, 2014 which allows small groups and individuals to keep some non-grandfathered plans through October 2016. This allows small business healthcare plans not eligible for grandfathering to be “grandmothered” instead. However, the final decision to allow grandmothering rests with each state’s insurance department. Currently, 29 states have approved it but the others may not. Click for Forbes article with an interactive map of status by state. 

What Plans Qualify?

In general, policies in effect on October 1, 2013 and renewed before January 1, 2015 are eligible for this relief for 2015; however, this may vary by insurance carrier. If you renewed a small group plan in 2013, you may be able to renew those plans again during 2014 for continuation into 2015, depending on whether your insurance carrier offers a grandmothering option. If your insurance carrier offers a grandmothering option to continue plans, the deadline for completing renewals is 30 days prior to your 2014 renewal date. Those renewed plans expire no later than 30 days prior to your 2015 renewal date. If you do not choose to take advantage of the grandmothering exception, carriers cannot reinstate plans terminated in 2013 and you will be subject to community-based rates under ACA compliance.

How Grandmothered Plans Affect You

Opinions vary greatly about how the new ACA policies will affect your rates. Because ACA plans use a different rating method, most agree that rates will not go down. Considerations for deciding whether to buy an ACA plan or a transitional, grandmothered plan include:

  • The cost of each plan
  • The potential for a premium tax subsidy for plans bought through the Exchange 
  • The ten essential health benefits provided by ACA plans

Let us Help Guide You 

There are several steps you can take to control your costs, whether you see large increases or not.  We can help you look at your current plan vs. an ACA-compliant plan, and pay specific attention to your choices around spousal coverage, coverage for children and plan design. 

Another option is joining a PEO like us, which makes your business part of a large group and thus has access to large group benefits. This collective large group plan is not subject to the restrictions of a small group. Our healthcare plan allows you to offer "large company" benefits to your employees and avoid ACA restrictions on small businesses. The road ahead is not easy for anyone, but we can help you make the best decisions for your business and employees. Contact us today. 

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