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Tuesday, May 24, 2022

ObamaCare: The Gift That Keeps Giving

The California Legislature passed SB 1446, known in health insurance circles as the “grandmothering” law, and Gov. Jerry Brown signed it this past summer with the promise that companies could have another 12 months to transition to the new Affordable Care Act (ACA) plans. But while the law had good intentions, only 70 percent of small companies will have the option of keeping their old plans. SB 1446 permits companies with fewer than 50 employees to renew their current health insurance plans for another year – but only if they renew from September to December and as long as insurance carriers allow them to. They also have the option to move to the new ACA-compliant plans. That’s tough luck for companies that renewed earlier this year and are now stuck with the new ACA-compliant plans, which benefit some but are more costly for many others. Aetna will not allow any companies to grandmother and employer groups have to move to the new ACA-compliant plans. Kaiser Permanente and Health Net Inc. permitted groups that renewed in September to keep their old plans while all other carriers are only permitting October to December renewals to keep existing plans. Why is that a big deal? Consider the costs facing my family and company – and this is our business, health insurance brokering and consulting. My company purchased our health plan in November 2013 with Aetna and therefore we needed to buy an ACA-compliant plan, but it came with higher premiums, higher out-of-pocket maximums and higher drug costs for us. Prices for ACA-compliant plans are developed using different age bands, rating tiers and rules regarding family coverage. That’s not to mention higher annual out-of-pocket maximums of up to $6,350 for an individual and $12,700 for families. The difference can be dramatic. Previously, my family’s coverage was priced using the age of my wife, who is younger, with the additional expense of one child – though we have a total of five children. Now every member of the family is rated individually and our monthly premium is rising $800 a month or by $9,600 a year. In the past few weeks I have reviewed over 50 companies to see if they should grandmother or move to the new plans. Each case has to be looked at carefully. While some companies are better off moving to the ACA plans, others are much better off staying put for one more year. The variables include the ages of employees, number of families, how many children each employee has and where the employees live. For example, a medical group in Santa Monica with 12 employees is better off staying put while a 30-person law firm can move to the new plans, save $30,000 a year and have better benefits. Every time a federal agency – whether it’s Treasury, Labor or Health & Human Services – makes a change in the law, delays implementation or creates a new regulation, some employer groups are always excluded. We now have to wait and learn what other surprises are sure to surface in the coming few years. Remember that famous statement by Nancy Pelosi: “We have to pass the bill so that you can find out what is in it?” The ACA is the law that just keeps giving and giving. Barry Cohn is chief executive of RGEB Employee Benefits, a Canoga Park insurance brokerage. – How to reach us GUEST OPINIONS: Op-ed pieces must be 700 to 800 words and on topics about the San Fernando Valley business community. Please submit op-ed ideas to editor@sfvbj.com. LETTERS: Please keep your letters brief. Include your name, address and daytime phone number on all submissions. We reserve the right to edit letters for brevity and taste. E-mail: editor@sfvbj.com.

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