Dear Valued Client:

As your trusted insurance advisor, we want to keep you updated regarding the latest regulations being released under the Patient Protection and Affordable Care Act (PPACA). This law will impact nearly every business and individual client, so we want to ensure that your company will be in compliance with its provisions.

Please click here for a Health Care Reform Timeline provided by the National Association for Health Underwriters summarizing what you can expect over the next several years. Many of the initial provisions, such as elimination of pre-existing conditions for children age 19 and under, will take effect on the first day of your plan year on or after September 23, 2010 (6 months following the date of enactment). It is also important to note that many fully-insured carriers are opting to implement some of these provisions in advance of the required effective date, such as the dependent age extension to age 26. Please let us know if you have questions about how your insurance carrier is handling these changes.

Of specific immediate concern is the provision regarding Grandfathered Plan status. Please click here for a description of Grandfathered Plan Requirements as provided by the National Association for Health Underwriters. If you decrease your plan's medical benefits, employer contributions or move coverage to another insurance company, you will lose your Grandfathered Plan status. At this time, it is unclear what the total impact will be for a company that loses its Grandfathered plan status. Many insurance companies have advised that Grandfathered vs. Non-Grandfathered plans will be pooled and rated separately. It is expected that Non-Grandfathered plans will have higher rates due to the additional coverage of benefits required by PPACA. We strongly urge you to consider any changes to your plan carefully before making a final decision.

Directly related to the Grandfathered Plan status is the issue of Management Carve-Out Plans and nondiscrimination rules as revised under PPACA. Please click here for details regarding the impact PPACA will have on these plans. Employers that have a management carve-out plan and employ 50+ full time employees (regardless of the size of the management care-out) will need to retain a Grandfathered Plan status or face very high excise tax penalties.

Please review this information at your convenience and let us know if you have any questions. We will continue to keep you updated as important additional information is released.

Sincerely,