Group Suggests Changes to Guidance on Nondiscrimination Rules for Insured Group Health Plans

From: Susan Trost [kstrost@mho.com]

One factor that needs to be considered for small groups is slight changes they make in benefits in order to keep the insurance affordable for their company and their employees.

For example, I had a small group change from a very rich HMO plan to a slightly higher copay plan (still a very rich HMO plan considering all the other options). The move allowed them to keep the cost of insurance about the same this year versus a 15% increase. The plan increased copays from $35 to $40, increased the hospitalization costs to $1K per day instead of a $500 copay for the entire visit, and gave pharmacy a $250 deductible. However, statistically the hospitalization will not likely be tapped for most employees as well as RX costs. Overall, the immediate premium savings were more important than paying the higher premium to potentially have a lower hospitalization and pharmacy costs (if even needed).

Since premium savings are not currently calculated, this employer is at risk for losing their grandfathered status (although their carrier has decided not to grandfather any plans). They currently utilize a management carveout as the other part of their staff is very transient and has never expressed interest in coverage in the past (most could not afford it). If this group is forced to offer coverage to all employees next enrollment, it is very likely that they would not meet their participation numbers and it would force all employees into losing their coverage. This is opposite the intent of Health Care Reform.

Small businesses are struggling in this economy still. Forcing complete staff coverage could put some employers out of business.

In summary, please consider the following: