Changes To Employer Health Plans Restricted By Proposed Reg 

Employers will lose the right to retain their current health care plans if they increase deductibles or co-pays by more than the rate of medical inflation plus 15 percent under regulations unveiled by the Obama administration Monday.

Employers will also be unable to increase cost sharing by more than 5 percent.

According to an analysis by an industry trade group, that would mean a plan could not be grandfathered—or retained by employers—if it, for example, changes a co-pay from $30 to $45, a 50 percent increase, and the rate of medical inflation is 8 percent.

The rule proposed by the administration is an interim regulation with a request for comment.

The regulation projects that compliance will not cause major changes for the 133 million Americans with employer-sponsored health insurance through large employers (100 or more workers).

But a fact sheet that accompanies the rule projects that the roughly 43 million people insured through small businesses will likely transition from their current plan to one with the new protections over the next few years.

Moreover, the 17 million people who are covered in the individual health insurance market—where switching plans and substantial changes in coverage are common—“will receive the new protections of the Affordable Care Act sooner rather than later,” the fact sheet states.

The administration issued the rule as required by the new Affordable Healthcare Act.

It allows employers to retain current health care plans only if they comply with the restrictions specified under the new regulation.

Under the interim rule, the administration projects that more than half the health care plans now in existence won’t be in compliance with the new rules by 2013.

• • 6/15/2010 9:05:02 AM
  • Alex
  • proposed health care regulations
  • The fairytale healthcare reform is turning into the nightmare on main street, elm street, and every other street!! And since you won't be able to make any significant changes to the plan the costs will go down too!!!!!! And pigs really can fly!! I hope everyone who reads this article uses their vote wisely in November. Anyone who voted for healtcare reform needs to be voted out in November!! On another note my business has 5 employees, myself, two of my children, and two other great employees. One of the other two employees has coverage through her spouse. When I looked into the wonderful new health insurance tax credit i discovered that the credit doesn't apply to the premium paid for the owner or their family members, so i will only get credit on $430 of the $2,500 monthly premiums paid. It really pisses me off that the idiots in DC want to penalize me because I have set my business up so my kids can take it over soon. Our rich health insurance plan is an Health Savings Account plan with a $3,000 individual deductible!!!! It is time for a total repeal!!!!

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