The rule would allow high-deductible health plans to increase cost-sharing requirements in order to meet the minimum required for plan members to be eligible for a health savings account. (Photo: Shutterstock)
When the Affordable Care Act took effect, many existing health plans were granted exemptions to some of its requirements, allowing insurers to continue offering low-cost health care plans. Such plans were allowed to remain in existence as long as they had been continuously offered since March 0f 2010 and certain changes hadn't been made. As noted by Modern Healthcare, approximately 13% of covered employees were enrolled in such a plan in 2019.
But times have changed. Or rather, health care costs have.
A proposed rule from the Departments of Labor, HHS and Treasury would create some flexibilities for group plans without jeopardizing their grandfathered status. The rule would allow high-deductible health plans to increase cost-sharing requirements–something that would currently cause them to lose their grandfathered status–in order to continue to meet the minimum required for plan members to be eligible for a health savings account.
The second change would offer an alternative method of calculating cost-sharing increases for copays, deductibles and out-of-pocket costs. Currently, such increases are tied to the Consumer Price Index, while advocates suggest the HHS's annual notice of benefit and payment parameters would be a better benchmark.
"The fact that a significant number of grandfathered group health plans remain indicates that some employers have found value in preserving grandfather status," Employee Benefits Security Administration's Jeanne Klinefelter Wilson said in a statement.
Currently, the six criteria that could cause a plan to lose its grandfathered status. Those are:
- Elimination of benefits related to treatment or diagnosis of a particular condition.
- An increase in percentage cost-sharing requirement (Coinsurance)
- Any increase in fixed-amount cost-sharing requirement that exceeds certain thresholds;
- Any increase in a fixed-amount copayment that exceeds certain thresholds
- A decrease in contribution rate by an employer toward the cost of coverage by more than five percentage points
- The imposition of annual limits on the dollar value of all benefits for group health plans and insurance coverage that did not impose such a limit prior to March 23, 2010
Last year, the department solicited feedback on how grandfathered health plans may be improved. Some commenters on the rule opposed any additional flexibility, arguing that such plans offer less-comprehensive coverage. Others countered that such plans are often more affordable for consumers, and that while not bound by the same criteria as ACA-compliant plans, many actually offer more robust networks and better coverage options.
The departments will accept comments on this new proposal through August 14, and any final regulations would be issued and go into effect sometime thereafter.
Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.
Your access to unlimited BenefitsPRO content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Emily Payne
Emily Payne is director, content analytics for ALM's Business & Finance Markets and former managing editor for BenefitsPRO. A Wisconsin native, she has spent the past decade writing and editing for various athletic and fitness publications. She holds an English degree and Business certificate from the University of Wisconsin.
