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Can You Keep Your Health Plan Once the Health Reform Law Kicks In?

Wednesday, August 18, 2010

Small business owners can expect a lot of changes coming down the pike due to the passage of health reform. One big question business owners keep asking is if they will be able to keep the health insurance plan they currently have, if they like it. The Administration and Congress frequently assured Americans, especially business owners, during the reform debate that yes, you can keep the coverage you have.

To follow up on this promise, the Department of Health & Human Services recently issues new regulations on "grandfathered" health plans. "Grandfathered" is a term that refers to existing health insurance plans that you, your family, your business and/or your employees are currently enrolled in that you may like to keep once new health insurance rules kick in over the next few years.

Even though the regulations surrounding "grandfathered" plans will allow you to keep your current insurance, there will be required changes to your plan:

-- Insurance companies must remove both lifetime limits on coverage as well as annual limits on coverage for all plans;
-- If you are the parent of a young adult under 26 years old, your insurance provider must now allow you the option of extending coverage to your dependent.
-- Should you get sick or if you made a mistake on your insurance application, insurance carriers are no longer able to drop or rescind your coverage on these grounds.

While these benefits may sound appealing, keeping your health insurance plan does have its limitations. To maintain your "grandfathered" status and keep your existing coverage, you must abide by the following rules:

• You cannot reduce the benefits you have in your plan or the coverage you offer employees. For example, you could not adjust coverage to stop covering a condition or a necessary treatment for that condition.
• You cannot change insurance carriers.
• You can only make minimal adjustments to your deductible or co-pays. In one year you can adjust your deductible no more than 4% to 5% to address medical inflation. For co-pays or cost-sharing with employees, a business owner cannot make more than a $5 increase or a percentage increase equal to medical inflation plus 15 percentage points in a calendar year.

For more details, visit:
http://www.healthreform.gov/newsroom/keeping_the_health_plan_you_have.html

 

To download the full survey results,

click here: NASE Monthly Poll- August 2010 Results- Grandfathered Status Rules


NASE Monthly Poll

August 2010

Results

"Grandfathered" Status of Health Plans

 

1)  Do you currently have health insurance for yourself and/or your family?
 
Answer Options Response Percent
Yes 92.4%
No 7.6%

 

2)  Do you have employees (full-time staff, excluding you) in your business?  

Answer Options Response Percent
Yes 24.7%
No 75.3%

 

3)  Do you offer health benefits to all or some of your employees?

Answer Options Response Percent
Yes 54.3%
No 45.7%

 

4)  Do you like your existing health insurance plan?

Answer Options Response Percent
Yes 43.2%
No 39.8%
No Opinon 17.0%

 

5)  Do you want to keep your existing health plan?

Answer Options Response Percent
Yes 49.6%
No 18.3%
Unsure 32.1%

 

6)  Since you started your business, how often have you shopped for a new health plan for you, your family or your business?

Answer Options Response Percent
More than twice a year 5.5%
Once a year 18.1%
Every other year 23.6%
Only when my medical needs or the needs of my family/business change 52.7%

 

7)  Since you have started your business, how many times have you changed insurance carriers?

Answer Options Response Percent
I have not changed my insurance carrier. 35.2%
I have changed my insurance carrier one time. 28.0%
I have switched carriers twice. 18.6%
I have switched carriers three times. 10.2%
I have switched carriers four times or more. 6.8%
Do not know 1.3%

 

8)  If you have changed insurance carriers in the last three years, what was the top reason?

Answer Options Response Percent
To obtain better service/unhappy with current service 8.6%
Needed to change benefits 4.6%
To get a better deal/lower my plan costs 55.3%
To obtain more or different choice of doctors 1.3%
Desired a different different plan type (PPO vs. HMO) 3.3%
Other 27.0%

 

9)  Have you kept your current health plan, but changed benefits, co-pays, deductibles, or cost-sharing requirements in the past year?

Answer Options Response Percent
Yes 23.8%
No 74.9%
Do now know 1.3%

 

10)  If you have made changes to your existing health plan, which of the following have you changed? (Please check all that apply.)

Answer Options Response Percent
Increased your deductibles or coinsurance by more than 15 percent. 80.8%
Adjusted your co-pays. 25.0%
Adjusted cost-sharing by employees. 7.7%
Dropped coverage for certain benefits (such as maternity coverage, mental health, etc.) 28.8%
Increased coverage for certain benefits (such as preventive care or wellness programs.) 9.6%
Changed covered drugs by, for example, requiring generics before brands. 13.5%
Required employees to get coverage from a doctor in the plan’s network. 1.9%

 

11)  What is your level of understanding about the new "grandfathered" plan requirements that may impact your ability to keep your plan?

Answer Options Response Percent
Clearly understand new "grandfathered" plan requirements 18.5%
Somewhat understand 43.3%
Slightly understand 21.9%
No understanding 16.3%

 

12)  If you are aware of the requirements to maintain "grandfathered" status of your health plan, do you think you will be able to keep your existing health insurance?

Answer Options Response Percent
Yes 42.8%
No 21.1%
Unsure 36.1%

 

13)  If you decide to not keep your existing health plan, are you aware that as you shop for health insurance you will be required to purchase a plan that conforms to new federal insurance rules which will provide more generous benefits but also may cost more?

Answer Options Response Percent
Yes, I was aware of that there will be new benefit requirements on health plans. 66.4%
No, I was not aware of new requirements on health plans. 29.3%
No Opinion 4.4%

 

14)  Do you believe the self-employed and small business owners should receive a notice from their insurer or from the Federal Government about whether their plan qualifies as a grandfathered plan?

Answer Options Response Percent
Yes 92.1%
No 3.5%
No Opinion 4.4%

 

15)  Please share with us your perspective on the new regulations relating to your ability to keep your existing health coverage and any other comments you may have on health reform.

Sample Responses:

These new regulations will be very costly and will our limit choices even more.

We should be able to keep our existing plan with no limitations. What small business owner has time to shop for healthcare constantly and has time to read all the fine print?

It's too confusing and I don't have time to keep up with it. I have to make a living.

As painful as change can be, I think this is change that will be very beneficial in the long run. It's unfortunate it took this long for health insurance legislation, and wish it had been a bit more bold and ambitious in its scope.

It shouldn't be so complicated. Instead of spending time to research health insurance, I'd rather be running my business.

I am less concerned with keeping my existing insurance, than I am with getting BETTER insurance, even if it costs more.

I pray that I can keep my existing plan at the current cost levels.  I DO NOT want government anywhere near our medical insurance.

I will shut my business down if I am forced to change my insurance.  I simply cannot afford any changes.  Unfortunate, but true.