The Department of Health and Human Services (HHS) recently made an amendment to current grandfathering regulations. Previously, an employer group health plan could lose its grandfather status if the employer, among other actions, changed health insurers. Thanks to this recent amendment, employers have more flexibility to shop their coverage and change insurance carrier and not lose their grandfathered status, so long as the structure of the coverage doesn’t violate one of the other rules for maintaining grandfathered plan status.
HHS was concerned that the original grandfathered language would yield the unintended consequence of forcing employers to offer the same level of benefits to all of their employees thus causing premiums to rise substantially. Ultimately, HHS realized that allowing employers some flexibility in this regard would help some Americans retain their current coverage and, perhaps, their jobs.
This is huge, but not because of what it does for employers or their employees. My guess is that the amendment will affect maybe 1% of consumers. What is significant, what we can’t lose sight of, is that this is clear evidence that HHS and the Administration are willing to listen to and act on employers’, consumers’, insurers’ and other stakeholders’ concerns and ideas on how to make healthcare reform more workable and successful for Americans.