Health Insurance Reform Update

September 23 has passed and ushered in a period of uncertainty for the health care industry with 3 more years of changes, ending with the individual mandates of 2014 and forcing insurers to do business within state based health insurance exchanges. Insurers are already adapting but the Republicans are now promising a vigorous campaign to chip away at the reforms with their new Pledge to America. Although health care reform is now law they could impact the funding if they regain control of Congress and President Obama's 2012 re-election occurs before the final reforms are scheduled to be implemented in 2014.

During the health care reform debate President Obama promised that people who liked their current coverage would be allowed to keep it. That's called grandfathering and employer group plans will only lose their grandfathered status if:

• The group chooses a new carrier after 3/23/10
• The group chooses any benefit changes after 3/23/10
• The employer changes contribution levels after 3/23/10
• The group does not maintain 1 enrollee at all times in all grandfathered plans

As the premiums continue to rise substantially employers may find it difficult, if not impossible, to maintain their grandfathered status. Changing carriers, making benefit changes to lower premiums, and cost shifting are almost a necessity for employers to continue to offer health insurance to employees amid the double digit rate increases this year. In fact, since 1999 the share of premiums paid by employees has increased 159%. But while employee contributions have grown significantly, the coverage has eroded substantially. This trend will probably only continue as the costs of health care reform are absorbed.