Thought You Could Keep Your Grandfathered Plan?
Not So Fast
November 1, 2013
Vol. 9, Issue 11
What you can do if your plan is cancelled.
Reports are flooding the media with news that the Obama administration knew as early as 2010 that its promise that Americans could keep their grandfathered plans was a classic “bait and switch” tactic to push the Affordable Care Act bill into law.
A swell of controversy is churning around as to what came first – Obamacare regulations making grandfathered plans doomed to fail under IRS regulations, or the big insurance companies using these regulations as a convenient excuse to drop your coverage.
The comfortable thought that was put forth in President Obama’s repeated declaration, “If you like your plan, you can keep your plan…period” is losing its credibility by the hour as millions of policyholders are finding cancellation notices in their mailboxes.
Critics of Obamacare are confident that the framers of Obamacare knew full well that the grandfathered promise was an empty one, because without pushing the vast majority of grandfathered policyholders into an ACA-qualified plan, Obamacare wouldn’t have the support it needs to provide subsidies to keep it afloat.
If your current or grandfathered plan has been cancelled with no coverage offered to you in 2014, you’ll have to buy an ACA-qualified plan.
If your grandfathered plan is still intact, there are things to consider.
Should you keep your grandfathered plan if you still have the option?
If you are happy with your plan and don’t want to pay the higher premiums that come with ACA-qualified plans, you may want to keep it as long as you can. It’s simpler for many people with grandfathered plans to avoid the hassle of changing plans and paying more for premiums and out-of-pocket expenses. You will likely be able to continue seeing the same doctor you now have. Many doctors and hospitals are opting out of accepting new patients under Obamacare, so keeping your existing plan might save you from the headache of physician-shopping.
What Grandfathered Plans Don’t Include
Guaranteed Acceptance of Pre-existing Conditions. If you have a pre-existing chronic health condition that has been excluded on your grandfathered plan, you now have the option of switching to an ACA-qualified plan. If you enroll in a new plan, you cannot be denied coverage for pre-existing conditions. Whether you suffer from diabetes, cancer, heart disease, or any other illnesses that were previously denied coverage, you can get guaranteed acceptance under an ACA-plan.
Health Tax Credits (Subsidies). Another important consideration is the possibility of qualifying for a health tax credit (premium subsidy) to help pay for your insurance premiums. Since your grandfathered plan is not an ACA-approved plan, keeping it will prevent you from applying for a subsidy.
We can help you determine if your income qualifies you for assistance with premiums, and also show you how to improve your chances of qualifying by enrolling in an HSA-qualified ACA plan. We recommend that you speak with your HSA for America Personal Advisor before applying for a subsidy, because the exchange won’t be able to show you how the slightest change in income can put you into an entirely different qualifying level. We can assist you with your application and on-exchange enrollment as well.
Remember also that there are other features included in all ACA-qualified health plans, such as Preventive Care Services that are probably not completely offered in your current plan.
Grandfathered plans are losing ground despite the President’s promise that they would remain untouched by health care reform. Grandfathered policyholders are fast joining the ranks of those losing their 2013 health insurance plans. For some, current coverage will be discontinued at the first of the year. Others may be able to stay on their current plans through the end of 2014.
If your current plan is staying in force through 2014, you will then have to sign up for a new ACA-approved plan during a special enrollment period. You will have the option of signing up for a plan “on the exchange” or “off the exchange”.
If you believe you’ll qualify for health tax credits (subsidies available to those earning less than 400 percent of the federal poverty level), your HSA for America Personal Advisor will submit your application through the exchange.
If you don’t qualify for subsidies or don’t want to purchase through the government exchange, we will submit your application directly to the insurance carrier.
It’s important to know that, no matter what the status of your current plan or whether you want to shop on or off the exchange, we can help you in every aspect of purchasing your coverage and applying for tax credits.
Get the facts
Keep in mind that your health insurance carrier is not required to automatically enroll you in a new plan when your existing coverage is ending. If they do automatically switch you into a new plan, they won’t be checking to see if you qualify for a subsidy or reviewing your policy to make sure it is the best fit for your needs.
Because of this, it’s vital that you check with your HSA for America Personal Benefits Consultantif you are not sure whether your health insurance carrier is planning to discontinue your grandfathered plan, We can also let you know whether or not you qualify for tax credits, and if there are less expensive plans available that would work better for you. We can help with plans both on and off the exchange.
December 1 HSA Deadline
Since the title of this newsletter is Maximize Your HSA, I would be remiss if I did not remind anyone reading this who does not have an HSA-qualified health insurance plan: You must get coverage in place no later than December 1, in order to take a write-off on your April 15th tax return. Which means you must apply NOW. (You have until April 15th to make the contribution).
Remember to make it clear that you want your policy to become effective December 1st, or you may miss the deadline opportunity to start contributing for 2013 tax breaks.
We believe in taking the complicated issues of health care reform, doing the homework for you, and being there with the answers you need. If you have questions about your situation, please let us know and we’ll be happy to help.
To your health and wealth!