Micro-Businesses Unsure of New "Grandfathered" Status Rules for Health Plans

August 18, 2010 (PLANSPONSOR.com) - Most entrepreneurs are uncertain that their health plans will meet new rules to qualify for “grandfathered” status and how the changes required by the health reform law will affect their monthly premium costs, according to a survey by the National Association for the Self-Employed (NASE).

Sixty-five percent of micro-businesses (less than 10 employees) say they only somewhat or slightly understand the new “grandfathered” plan requirements and how it may impact their ability to keep their plans. A press release said, of those aware of the requirements to maintain “grandfathered” status of a health plan, 43% believe they can keep their plan. Fifty-seven percent are either unsure or know they will not be unable to keep their current plan.   

Ninety-two percent believe the self-employed and small business owners should receive a notice from their insurer or from the federal government about whether their plan qualifies as a “grandfathered” plan.   

Close to 50% of micro-business respondents indicate they wish to keep their current coverage.  

The survey found approximately 67% of respondents have changed insurance carriers since the inception of their business, with 55% indicating that the primary driver for the change corresponded with the desire to find a better deal or lower costs. Many who made adjustments to their existing health plan to address costs did so by adjusting their deductibles — a move that, under proposed rules, NASE noted, would force them to lose their “grandfathered” status.  

Full survey results are available here.