Is it possible that the Cadillac Tax will be a major health spending cost ‘deflator’?
Small employers with group medical renewals later this 2014 year, mostly Q4, will have the option to keep their current plan for another 12 month period. Prior to the recent passage of SB 1446, the ‘grandmothering’ bill signed by Governor Jerry Brown, small employers renewing in 2014 were required to change to new ACA compliant plans which were often accompanied by 30-85% rate increases, new rating structures and reduced benefits to accommodate the cost increase.
Small employers who are eligible for this option will be notified by your carrier via mail and your renewal will reflect this option. This will postpone some of the cost impact, rating structure changes and plan changes you will need to make as a result of Health Care Reform for an additional 12 months. However, please be advised that the decision to remain with your current plan will not be the best decision for every employer. New products are on the market from each carrier and new strategies are available to consider, so it is best to do a market evaluation once again this year.
For small employers who renewed prior to the passage of SB 1446, there is no information yet about how the changes you were forced to make will be addressed for missing the window of the application of this ‘grandmothering’ law.
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