HCW Benefits Blog

Contributors:

Ellen Tucker, CMCE - Consultant
Hill, Chesson & Woody

Rob Krieg, JD, CEBS - Consultant
Hill, Chesson & Woody

If we have an executive medical reimbursement plan, can we keep this plan in place, and if so, for how long?

If the executive medical reimbursement plan was in existence on March 23, 2010, and had individuals enrolled on that date, the plan may qualify for grandfathered status and be exempt from complying with the nondiscrimination requirements.  The plan will not lose grandfathered status if it enrolls:

• newly hired employees,
• dependents of newly hired employees, or
• new dependents of currently enrolled employees. 

However, any other change to the plan may result in the loss of grandfathered status.

What kind of rate impact will the elimination of pre-existing conditions in my contract have on my rates?

Most carriers are predicting the cost of this to be under 1.5%.  Cigna recently published a document titled PPACA - Near Term Financial Impact on Medical Claims, that showed the cost of removing Pre-Existing conditions for enrollees under the age of 19 to be between .1% and .5%.  Many group plans do not have pre-existing clause on new employees or their dependants and if they do, the majority of them are not subject to pre-ex due to the HIPAA credible coverage rules.

How long will we be able to maintain grandfathered status for our medical plan?

It may be difficult to maintain grandfathered status.  Any changes you make to your plan are compared to the plan you had in place on March 23, 2010.