Flexibility More Important than Grandfathered Status

A recent Hewitt Associates survey has found that 90 percent of large employers expect to lose their plans' grandfathered status by 2014, with the majority doing so within the next two years. Under the "grandfather" provision of the new health reform law, health plans can maintain many of their current coverage provisions and are not required to comply with certain new mandates if they do not significantly reduce benefits, change insurance carriers, or increase cost-sharing obligations.

Of the 466 companies - representing 6.9 million employees - that were surveyed by Hewitt, 72 percent expect to lost grandfathered status because of health benefit plan design changes and/or changes in cost-sharing requirements. Additional reasons cited were consolidation of health plans, changes to insurance carriers, and union negotiations. The survey also found that most self-insured plans (51 percent) are expected to lose grandfather status in 2011 and another 21 percent will lose their status in 2012. This expectation is similar for fully-insured plans.

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Health Care Reform - The Costs of Inaction

Business Roundtable recently released a report, presented by Hewitt Associates, a human resources outsourcing and consulting company, on the costs of not reforming the nation's health care system. From the report:

This report makes a case for the potential benefits of health reform if it is done wisely. The United States can reduce upward health care cost trends and expand access for most Americans if:

• Health insurance coverage is expanded to as close to universal levels as we can reasonably get
• Existing sources of employer-based coverage are not disrupted or displaced or saddled with significant additional costs and compliance burdens
• Expanded coverage is accompanied by meaningful delivery system reform led by changes to Medicare; and
• As expected, purchasers in the private sector adopt these reforms.

The report can be found at: http://www.businessroundtable.org/sites/default/files/BRT_Hewitt_HC%20Reform%20Report_Sept2009_FinalONLINE.pdf