The Grand Plan for Healthcare in 2016

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When it comes to small business health insurance, one thing is certain: change is guaranteed. In 2016, many small business owners will need to reconsider their current health insurance and make a decision.

To determine if you are one of the groups that will need to re-evaluate your plan, let’s start by reviewing the current benefits landscape. As a COSE small business owner, there’s more than a 90 percent chance you’re currently in a grandfathered or transitional/grandmothered health benefits plan. Or maybe you’ve already made the leap to an Affordable Care Act (ACA) plan. Either way, here’s a quick recap of all three plan options:

Grandfathered Plans

Grandfathered plans are defined as those plans created on or before March 23, 2010, that are exempt from certain ACA requirements and might, as a result, be more affordable. For instance, grandfathered plans do not have to cover essential health benefits, annual maximum out-of-pocket (MOOP) limits and preventive benefits that require no cost to employees. There are other benefits to being a grandfathered plan. Grandfathered groups are not subject to community rating, which sometimes results in premium increases that can be drastically higher than grandfathered health plan offerings. Most grandfathered plans are no longer available in the marketplace, so if you like your plan, you may want to keep it. There is no requirement to change.

Transitional/Grandmothered Plans

The intent of the ACA was to require all non-grandfathered groups to switch to an ACA plan. In 2014, the president decided to allow non-grandfathered groups to keep their plans until 2015, and then again until 2016. These groups are considered transitional/grandmothered.

In general, policies in effect on October 1, 2013, and renewed before January 1, 2015, are transitional plans. Groups with grandmothered/transitional plans will need to move to an ACA plan, if their policy renews between October 2, 2016, and December 31, 2016, unless the government grants an extension.

If you are currently enrolled with Medical Mutual, your grandfathered and/or grandmothered/transitional status can be found in your renewal packet on the benefit summary page. If you are a group with both a grandfathered and transitional/grandmothered section (dual option), you are considered a transitional/grandmothered plan. When transitional relief has ended, you will be required to move into an ACA plan.

ACA Plans

ACA plans are all plans that are not grandfathered or transitional/grandmothered. These plans require employers to offer 10 essential health benefits to meet all ACA requirements. Unlike the other plan types, groups with ACA plans can change their benefits every year.

What should I do now?

Grandfathered plans: Consider your two options. You can stay grandfathered or make the switch to ACA. If your group’s overall health has worsened, there’s a chance ACA rates are lower and you may see an ACA plan as the better option. However, there are still reasons to consider maintaining your grandfathered status. With grandfathered status, you can continue with an underwritten rate when your group’s health risk improves. You can maintain benefits without the additional cost of ACA requirements, such as essential health benefits. 

If you are wondering whether you should switch to an ACA plan, we urge you to discuss this with your broker, or contact the COSE Benefits Group at (440) 878-5930 or cosebenefits@medmutual.com.

If you want to keep your plan, ACA requirements will not impact your group as long as you do not make significant plan changes. Guidelines for maintaining grandfathered status are available in the sidebar with this article. 

Transitional/grandmothered plans: As of now, you will need to switch to an ACA plan in 2016. You may be wondering if it’s better to make the switch to ACA before it is mandatory. Keep in mind that for as long as you’re a transitional group, you’re not subject to ACA mandatory benefits, community rating or rate benefit design limitations. If your plan is working for you, it may be best to stay transitional/grandmothered as long as possible. There is also a chance that the government will extend this transitional relief again. Also, there may be additional future plan options allowing you to delay your switch to ACA in 2016. We will keep you informed of all government changes and any new product options.

ACA plans: The only requirement for those with ACA plans in 2016 is they recertify their status as a small group. All small groups have to certify their status as a small group to ensure they are placed in the correct market segment. If you have not done so, contact your broker or Medical Mutual Service Representative to get the information needed for certifying your group.

If you have any questions on what the future may hold for your group, or if you’re not sure whether or not to switch to an ACA plan, we urge you to talk with your broker or Medical Mutual Sales Representative. 

How to Maintain Grandfathered Status

When it comes to staying grandfathered, the list of things you can’t change seems endless. The easiest way to approach the topic is to consider the things you can change and still maintain grandfathered status. This includes:

  • The addition of family members or the addition of new employees.
  • Stopping coverage of one or more individuals who were enrolled on March 23, 2010, (as long as the plan or coverage has continuously covered at least one person since March 23, 2010). 
  • Adjusting plan premiums as long as the adjustments do not affect relative contribution levels. For example, if an employer contributes 50 percent of an employee’s premium, an increase in the employee’s premium contribution is permitted. The employer’s contribution will just need to be increased accordingly.
  • Moving from Medical Mutual to a new group policy or plan with another health plan issuer (either the same or a new company) as long as no changes are made to the plan’s benefit structure that violate other rules for maintaining grandfathered status (effective November 15, 2010).