The Affordable Care Act, often referred to simply as the ACA, can be a complex and trying exercise for fund trustees and administrators. This is especially true for those plans that self-insured and are concerned with losing the current grandfathered status of their plan(s).
Now the ACA does allow for certain changes in grandfathered plans without losing status. Such changes are often related to a percentage increase in premiums, co-pays and contributions, as well as pharmacy formularies. Allowed changes and other parameters are available for review at www.HealthCare.gov.
As funds are faced with increased costs, and often issues with contributions, moving only the Medicare eligible members, to a fully insured Medicare Advantage Health Plan and/or a fully insured Medicare Part D pharmacy plan, could be part of the solution. These Medicare Advantage plans can help maintain costs and benefits, and possibly provide cost savings and benefit improvements.
In reviewing the ACA and the concerns expressed by fund trustees and administrators, in regards to placing their current grandfathered status in jeopardy, the Humana Legal Department has done its due diligence is confident in stating;
Removing retirees from the eligible population of a self-insured medical and/or prescription drug plan is not a change that would result in the self-insured plan losing its ACA grandfathered status. Likewise, it is unlikely the self-insured medical and/or prescription drug plan would lose its ACA grandfathered status if, later, those retirees were moved back to the self-insured medical and/or prescription drug plan. A plan that continues to exist loses its grandfathered status only if it makes one of six changes delineated in federal regulation; reducing the population eligible for the plan is not one of them.
As each plan, and its covered Medicare-eligible retirees, has different needs, it is highly recommended that the plan fiduciaries seek out guidance and review all available options to fulfill their mission. For more information about the contents of this article, please contact 888-666-0710.
Ron Abrahall, RN
National Labor Relations Representative
HUMANA | Group Medicare
It is highly recommended that you seek out your own legal opinion prior to making any decisions and use this information for educational purposes only.