Change in Employer Contributions

[oriecat]

Is there anything in ERISA, Sec 125, PPACA, or anything else, that would prevent a plan sponsor from changing their contribution structure, and therefore the employee paid premium, in mid plan year?

[J Simmons]

I do not think anything would prevent it. But if you drop the employer contribution, increasing the employee share, vis-a-vis the 3/23/2010 levels, you'd lose grandfathered status under PPACA.

[oriecat]

Thank you! That is an important consideration, as we have 3 medical plans, one of which is considered grandfathered right now, since we made no changes at our last renewal. If the grandfathered status is lost, would that take effect immediately or at the next plan renewal? I assume plan renewal, but then that seems a little weird as employers could effectively play the system by making material changes right after renewal which then don't affect their status until the next time.

Also, has there been any more guidance on if the 60 day notice is required yet?

[oriecat]

I think my assumption was wrong, based on question 26 here, and the change would be immediate.

http://www.bakerdaniels.com/services/pract...yer-hcr-qa.aspx

[J Simmons]

I agree with Baker & Daniels, the loss of grandfathered status would be immediate.