Sep 28, 2010

Is Grandfathering Such a "Good Thing"?

Posted by: Neal

During the health reform debate, much was said about allowing people ‘who liked their current coverage to keep it’. This is referred to as “grandfathering”.

For example, a group could lose its benefits’ “grandfathered” status for any number of reasons, including:

* If the group chooses a new health carrier after 3/23/10
* If the group chooses even relatively modest benefit changes after 3/23/10
* If the employer chooses to change contribution levels after 3/23/10
* If the group does not maintain one enrollee at all times in all “grandfathered” benefit designs

“Grandfathering” may have limited real value for employers. The health insurance market is in constant flux and trying to keep current benefits and contributions frozen in a time capsule as of 3/23/10 is impractical.   We are not sure if the carriers will even retain "grandfathered plans" to continue and if they do, who knows what the cost will be.  We are not advocating that you ignore the "grandfathering" rules and whether it is important to your situation. However, we would encourage you to look at the big picture before deciding that you need to "grandfather".  If you would like our opinion on your specific situation, please feel free to contact us.



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