With health insurance costs climbing and open enrollment season almost upon us, you might expect that the boss will do everything to wriggle out of new requirements coming down with the federal health overhaul.
But that may not be the case. And in a way you might not expect, those decisions could put you on the hook for higher deductibles, copayments and out-of-pocket costs.
The issue? Some of plans are changing because employers have decided that they don't need to hold onto the special “grandfather” provision that the new health care law offered them.
Many employers are deciding to add benefits required by the health reform law, according to a new survey, instead of taking the option of sticking closely to the plans they already have. Under the law, employers are allowed to be exempted from a number of the rules because their plans would be “grandfathered,” which could exempt you from some of the additional costs.
To retain grandfathered status, plans can't increase employee coinsurance rates at all or raise deductible and copayment levels significantly higher than the rate of medical inflation. They also can't lower their own premium contribution more than 5 percentage points.
A survey of nearly 1,100 employers by benefits consultant Mercer found that just 53 percent believe they’re likely to hang onto grandfathered status for all their plans in 2011. That's quite a bit lower than the 67 percent to 85 percent the federal government estimated in June when it released interim regulations on grandfathered plans.
On the other hand, employers have calculated that many of the new required benefits for plans that don’t have grandfathered status are not very pricey or are benefits they already provide, such as free preventive care and access to ob/gyns without a referral. "Companies decided to just go ahead and make changes because the things that would be required of them if not weren’t big enough,” says Tracy Watts, a partner at Mercer.
So what changes are employers considering to manage costs — and increase what employees pay — that would cause them to lose their grandfathered status?
- 35 percent would increase deductibles or out-of-pockets payments above the limits.
- 23 percent would raise copays above permitted levels.
- 31 percent would increase co-insurance levels beyond grandfathered limits.