Small Businesses Received a Reprieve
Tacked into the Medicare provider payment fix bill was a repeal provision that removed the $2,000 single deductible maximum. The bill passed the U.S. House of Representatives in late March, passed the U.S. Senate on March 31 and was signed into law on April 1.
While small group plans were operating under a waiver program from the Department of Health and Human Services (HHS) with respect to the deductible limit, the waiver was only valid until 2016. At that time, the small group definition expands from two to 50 full-time equivalent employees to two to 100 full-time equivalent employees. Originally, the waiver was only for bronze level plans, as it was quite difficult to get to the actuarial value level with that low of a deductible. Some state insurance commissioners however, allowed it for plans other than those at the bronze level.
What does this mean for employers? Immediately, smaller employers will see no change. Insurance carriers must file their new plans and rates well in advance, so we may not see changes for at least a year on the benefit plans where the insurance commissioners took the HHS waiver verbatim.
Groups in the 50 to 100 full-time equivalent market will not see any changes, at least until 2016 when several market reforms will be applicable. These include limiting plan choice to the metal levels (Bronze, Silver, Gold, and Platinum), coverage of Essential Health Benefits (EHBs), age ratio limitations on premiums, and pediatric dental and vision mandates.
The best news from this will be the flexibility it will allow employers to have higher deductible plans, so they can utilize Health Reimbursement Arrangements (HRAs) and Health Savings Accounts (HSAs), not only to save premium dollars, but to help employees and their families with the higher deductibles.
For further information about trends in health plan design, and in particular the latest trends in high deductible health plans, download a copy of the 2013 UBA Health Plan Survey Executive Summary.
By: Carol Taylor
Employee Benefit Advisor
D&S Agency, a UBA Partner Firm