- 7,790
Oops, I thought you were talking about health plans for grandfathers. Forgot to take my meds again!
Grandfathered Health Plans
- Thread starter ABC
- Start date
- Thread starter
- #12
- 4,096
I think this is a very real possibility. I saw a predictive model from one of the carriers that expect 20 million people to go onto the exchange.
Most small groups will drop group coverage. Most groups 50-100 will drop coverage.
My personal thought is the exchange is going to be very expensive much more than what anyone is thinking. So even if the insured is eligible for a tax credit they still have to have the money to pay the premium.
From my understanding, its not that the employer has to eat all but 5% of the premium increase, its that they can only change their existing split by 5%. So if they currently have an employer/employee 80/20 split, and premiums go up 20%, the employee's share will still go up by 20%, as a matter of fact it could go up by 50% if you implemented a full 5% change in the split to 75/25.
Am I reading this incorrectly?
- Thread starter
- #14
- 4,096
No you are way off.
The employer cannot pass on anymore than 5% increase in cost to the employee. Also the employer cannot make any plan changes that reduce benefits. If they do they lose the grandfathered status.
Tax credits will not run in perpetuity, in spite of political snake oil peddling and those who voted for change.
http://insureblog.blogspot.com/2010/06/health-insurance-stimulus-money.html
- 3,351
Change this time has dire effects. Thanks to all Demoncrats.
ABC, perhaps you are misunderstanding me. If premiums go up by say 20% b/c of medical inflation, then yes, the plan can pass on those costs to the employee and still remain 'grandfathered', assuming of course it doesn't reduce benefits, etc. What it cannot do is shift a greater percentage of those costs onto the employee, either through increased deductibles (above a certain allowed increased), increased co-insurance (not at all), increased co-pays (above a certain allowed amount), or increased percentage of the premium paid for by the employee (by more than a 5% shift)
If you are operating under the assumption that employee premiums on an absolute basis can only increase by 5% (in addition to all the requirements being met) to remain grandfathered, I would suggest you re-read the regulations.
Highmarkagent
New Member
- 18
Grandfathered plans will never be what they should be and by crunching some numbers it seems that it will be cheaper for the large publicly traded companies to drop their health plans altogether and just pay the penalty. They will save up to 50% until 2014 and somewhere along the lines of 10% after the maximum penalty is levied. So as publicly traded companies they have a duty to the stock holders to maintain a profit and shedding health care could do this. Personally I would rather have 100 individual health sales then a 100 person group.
- 15,041
Feel free to point out any flaws you see in this, but this is what I really suspect will happen.
There will be a massive increase in new PEOs. Put all the rank and file employees in the PEO and price the cost of the fine into the fees. Then just have a group plan for the executives and managers. Best of both worlds then, massive cost savings on the majority of the employees, but the top employees get the plan they want.
There will be a massive increase in new PEOs. Put all the rank and file employees in the PEO and price the cost of the fine into the fees. Then just have a group plan for the executives and managers. Best of both worlds then, massive cost savings on the majority of the employees, but the top employees get the plan they want.
- 3,351
What the hell is a PEO Vol Agent? Geez stop talking over our heads.
