SB-1446 “Grandmothering” Health Care Coverage

Grand Mothering Health Insurance

As your broker we find it imperative to the success of your business to follow the ever changing laws regarding the status of our health care system. Currently we have been following the progress of SB 1446, affectionately known as the Grandmothering Law, in the California Legislature. This SB-1446 is called “Grandmothering”, as opposed to “Grandfathering”, because it will only be in effect for one year instead of an ongoing term that is allowed by Grandfathering.

According to SB-1446

“This bill would allow a small employer health care service plan contract or a small employer health insurance policy that was in effect on December 31, 2013, that is still in effect as of the effective date of this act, and that does not qualify as a grandfathered health plan under PPACA, to be renewed until January 1, 2015, and to continue to be in force until December 31, 2015. The bill would exempt those health care service plan contracts and health insurance policies from various provisions of state law that implement the PPACA reforms described above and would require that the contracts and policies be amended to comply with those provisions by January 1, 2016, in order to remain in force on and after that date”.
In order to carry out the extended transitional policy under the federal Patient Protection and Affordable Care Act (Public Law 111-148) announced by the United States Department of Health and Human Services, Centers for Medicare and Medicaid Services on March 5, 2014, and to allow small businesses to reenroll in their current health care coverage until 2016, it is necessary that this act take effect immediately.

What does this mean for Small Employers?

If passed, this law will allow California’s small employers to extend their pre-ACA, non-grandfathered Medical plans for an additional year. As long as the health plan was in effect on October 1, 2013, including groups that chose to early renew in December 2013, they may be allowed to renew for an additional year. Even though employers may be able to keep the same plan, the rates associated with those plans will likely experience a rate increase.
Also keep in mind, most of the policies that will be allowed to renew under this bill already comply with many ACA and state-based reforms such as 100% coverage of preventive care, the elimination of lifetime maximums, maternity care, and more. They will not, however, include Essential Health Benefits (EHBs), individuals 19 and older will still be affected by pre-existing conditions, RAFs and age-banded rates will still apply, etc.

Why is SB-1446 making these changes?

There is a huge possibility that this SB will pass because of the upcoming election. The next election is approaching soon and the Democrats in office are concerned that they are on their way out because of the chaos and havoc created by ACA. By trying to kick ObamaCare down the road one more year, they are hoping to be able to obtain your votes and maintain their jobs.
Although this push off could keep Democrats in office for one more term, it could be good for Small Businesses because there is a possibility that you could keep the lower deductable and lower Out-of-Pocket options for one more year.

What are your options as a Small Employer?

You have the option to remain with your current coverage for one more year or switch to new coverage that complies with the new laws. As Small Employers are different, you should talk with RiverCity Benefits and Insurance Services to discuss your options.

About David Brown

David Brown is a California Benefits Broker, who specializes in providing small businesses with the savings that only large companies usually get.

If you feel David could help your California business with employee benefits, health insurance, and healthcare reform issues, you can contact him directly below:

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