NAHU Submits Comments on RFI for Grandfathered Plans
Our response included discussion of the challenges employers face in continuing a grandfathered plan...
This week NAHU responded to a request for information from the Departments of Labor, Health and Human Services and Treasury asking for input on the maintenance of grandfathered plans under the ACA. NAHU worked with members of our Employer Working Group to put together comments that reflected the current status of grandfathered plans in the market. Our response included discussion of the challenges employers face in continuing a grandfathered plan, reasons an employer may choose to discontinue a grandfathered plan, and other issues in the market that need attention from the administration like grandmothered plans, ERISA electronic delivery rules and high-risk pools.
We found there are a number of different reasons employers take in to account when determining whether to continue with a grandfathered plan; however, one of the leading factors is that many of the financial measurements used to determine whether a plan is “grandfathered” are still measured at pre-ACA levels. As we mark the ninth anniversary of the ACA being signed in to law, we also note the rise of premiums, out of pocket contributions, and deductibles. Since grandfathered plans are still measured at pre-ACA rates in comparison to these changes, many employers are incapable of continuing to offer decade-old grandfathered plans in such a changed economic environment.
Aside from these challenges, NAHU also took the opportunity to use this letter to voice our concern on a few other issues that the agencies oversee: grandmothered plans, modernization of ERISA electronic distribution rules, and our support of high risk pools and reinsurance. CMS recently announced that they will allow states to determine whether to continue to offer grandmothered plans through 2020; however, we noted that a longer term solution needs to be put in place and that annual renewal of this option does not allow employers to adequately plan their benefit structures. In addition, we have repeatedly expressed the need to update ERISA electronic distribution rules to correspond with a change in how employers and employees communicate and to ease many of the communication restrictions on employers. Finally, the RFI requested information on how grandfathered plans impact individual and small group high risk pools. We have found that there is not much of an impact on these risk pools, but encouraged the administration to promote the establishment of high risk pools and reinsurance programs as those states that have done so have seen a lowering of premiums and positive impact on the health insurance market.
NAHU will continue to work with the administration on the approval and maintenance of grandfathered plans, and will notify our members if there are any changes to the process for grandfathered plans as a result of the administrations RFI.