WHY GRANDFATHERED PLANS MAY NOT BE GOOD…
Of all the plans I have reviewed over the last few months that were grandfathered out of the PPACA requirements, nearly 2/3 do absolutely NOTHING for the employer. Most, in fact, have negative affects, such as annual or lifetime limits on benefits or other such issues. In most cases, it appears that grandfathering is not usually the best thing any more. Heres why:
-Grandfathered plans retain the annual or lifetime limits on benefits that could restrict employees from getting complete coverage.-Most Grandfathered plans have certain other PPACA changes already incorporated, such as coverage to age 26 for dependents.
-Grandfathering will likely not be allowed by the feds to continue much past the next few years, plus the insurance companies themselves will likely only continue them if they benefit the insurance company, NOT the insureds or the employer.
-Older plans are rated by health Experience, while PPACA plans are rated through Community Rating. Experience rated policies might be helpful for groups that have had relatively few and low claims, but for groups that are not as healthy, switching to a non-grandfathered plan could very well lower their rates.
For the most part, companies retaining a grandfathered plan should be cautious. You should ask your agent, rep or broker WHY they recommend keeping your policy grandfathered, WHAT it does to help you or your employees (and to be specific), and WHAT it might include that is potentially detrimental to the employer or employees.