A coalition led by NAHU, retail stores, various types of franchises and many small businesses was featured this week in a Congressional Quarterly story calling on the Obama administration to revise its regulation on what plans are “grandfathered” and therefore exempt from some of the requirements of the health care overhaul law.
We maintain, along with many employers and other stakeholders, that the requirements for maintaining grandfathered status set out in an interim final rule are much too difficult to meet. As proof, estimates in the rule itself indicate that by 2013 as many as 69% of all employer plans and 80% of small businesses will relinquish their grandfathered status.
The Coalition for Affordable Health Coverage, of which NAHU is a leading member, said in its comment on the interim final rule that it strongly supports the ability to maintain grandfathered status, because “grandfathered plans will likely be less expensive and thus more affordable.”
In addition to NAHU, the coalition consists of the International Franchise Association, the National Retail Federation, the U.S. Chamber of Commerce and the Health Care Leadership Council, among other organizations.
CAHC urged that employers be able to switch insurance carriers without losing grandfathered status. Small businesses “are struggling to keep their businesses open, create jobs and provide health coverage,” said our coalition’s comment letter to Health and Human Services Secretary Kathleen Sebelius. “They do this partially by shopping for a better deal, and yet the HHS rule would require them to relinquish grandfather status if they seek to obtain a lower cost plan, even if the plan provides the same level of benefits.”
Our coalition also said that allowable yearly increases in cost sharing are too low and that bigger increases should be permitted without a loss of grandfathered status. The alternative is that small businesses will have to buy more costly plans that do not have grandfathered status, it said. As a result, “employers, especially small businesses, may choose to forgo offering coverage altogether.”
NAHU also submitted our own detailed comments on grandfathered plan issues specific to our membership. In our association comment letter we discussed exception options for individuals and groups who lose their status through no fault of their own or need to reduce coverage options in order to maintain health plan affordability. We also covered potential changes to the cost-sharing limitations and extending transition rules to health plans that renewed their coverage within 120 days of the release of the IFR. NAHU also sought clarification on a number of issues identified by our members as problematic within the IFR, including the impact wellness and disease management program changes may have on grandfathered status, how a change in stop-loss carriers could impact a plan, and how beneficiary notification requirements must work. A copy of NAHU’s separate public comments on grandfather plan Interim Final Regulations can be accessed here.