Less Than 20 Percent Of Health Plans Will Retain “Grandfathered” Status In 2013

Fifty-eight percent of employers that offered health care coverage in 2012 had at least one plan that was “grandfathered,” but an examination of 2013 plans reveals that, on average, less than 20 percent of plans retain that status, according to the 2013 Medical Plan Trends Report from HighRoads and CEB. This may be due in large part to a greater need for employers to appear to have more competitive health benefit plan choices, the report noted.

Grandfathered plans are exempt from some of the specific compliance requirements of the Patient Protection and Affordable Care Act (ACA).

“Health care continues to be a significant component of the benefits packages that deliver the overall employment value proposition,” said Cynthia Weidner, vice president of health and welfare consulting at HighRoads. “Yet, employers are looking for ways to maintain that value while working to control costs and assure compliance to increasing reform requirements. As a result, plan designs are changing but with careful attention to not damage the employee-perceived value of the benefits they have come to expect.”

The survey also found the following:
More free preventive care. The study found that 87 percent of plans offered free prostate screening, up from just 26 percent in 2012. It also found that 90 percent offered free pap smears and routine mammograms, an increase of 56 percent since 2012.
More equal emphasis on adult and child wellness. In 2012, medical plans were almost 10 percent more likely to offer low-cost preventive care visits for children than adults. In 2013, 84 percent of plans include low-cost preventive care visits for both children and adults.
“Cadillac” tax. Plans are at risk of incurring the “Cadillac” tax, a charge on plans with annual premiums exceeding $10,000 for individuals or $27,500 for a family that will take effect in 2018. Nearly one-in-five plans still have a $0 deductible, and 55 percent of plans charge $20 or less for a primary care physician visit copayment. Thus, organizations must take a careful look at their plans and redesign them to mitigate the tax while protecting the employment value proposition.

“Research shows that reform is impacting health care plan design in ways that may deliver different benefits options to employees,” said Ania Krasniewska Shahidi, senior director at CEB. “However, if employee communication about plan changes and new plan choices are not emphasized properly, their perceived value may be impacted. By delivering clear and consistent communication to employees and their families about how to best utilize their plans, employers will be able to balance compliance responsibilities with heightened employee satisfaction.”

For more information, visit http://www.highroads.com.

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