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Change from PPO to High Deductible Plan with HSA


Guest Ignatius J. Reilly

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Guest Ignatius J. Reilly

Is it possible to change from a PPO to a HDHP with HSA and maintain grandfathered status (for example, if employer increased its contributions to the extent necessary to ensure that employer contribution percentage is greater under HDHP than under PPO)? Or, as I think is more likely the case, is it impossible for an employer that offered only a PPO on March 23, 2010, to offer a HDHP and have that HDHP be a grandfathered plan because the HDHP "benefit package" was not offered on March 23, 2010?

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Guest sniffles
Is it possible to change from a PPO to a HDHP with HSA and maintain grandfathered status (for example, if employer increased its contributions to the extent necessary to ensure that employer contribution percentage is greater under HDHP than under PPO)? Or, as I think is more likely the case, is it impossible for an employer that offered only a PPO on March 23, 2010, to offer a HDHP and have that HDHP be a grandfathered plan because the HDHP "benefit package" was not offered on March 23, 2010?

The whole point of grandfathered plans is to keep your existing plan and not have to cover some of the changes required under Health Reform. That being said, only your PPO Plan was in existence so it can remain grandfathered (if all requirements are met). Any NEW plan being offered would NOT be grandfathered.

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The employer may be considered to have one "plan" from periods prior to March 23, 2010 through now. If so, changing from a PPO to an HDHP may not necessarily blow GF status just because of the switch.

More likely is that you will lose GF status because the deductible under the HDHP is higher than the deductible under the PPO.

More facts are needed to make a definitive determination.

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