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Change from HMO - Still Grandfathered?

Guest smckinlay

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Guest smckinlay

A client has changed from an HMO to an HMO-like plan from a different insurance provider. Although the coverage in the new plan is exactly the same for in-network services, additional deductibles and out-of-pocket maximums are added for the new plan's non-network providers. Under the HMO (the old plan), participants could only go out of network if a network provider was unavailable or the non-network benefit was "medically necessary". However, in such cases, the benefit received would be treated as an in-network benefit.

I was hoping to hang my hat on value-based insurance design, but I can only find approval for this related to preventive care (rather than deductibles or OOP maximums). Does anyone have any guidance as to whether this plan may still be grandfathered? Thank you!

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I generally don't provide "I don't know" answers, but no one has replied.

I cannot put my finger on this one, but something smells fishy and I have two concerns, but no real definitive answer for you. Sorry.

First, does the introduction of a PPO OON feature now constitute a significant OOP issue? I don't believe it does, but cannot be sure.

The second, and more concerning to me is the transfer rule issues. The law is trying to prevent an employer from transferring enrollment to another plan for reasons that will benefit the employer and to some extent hurt the employees. When you say they are going to a HMO-like plan, it appears to me that they are going from a HMO contract to an EPO contract.

As a side note, if this group is fully insured, or if you are keeping a high level of benefits (what is usually associated with HMO coverage) your efforts at value based plan design may be fruitless. I don't know the particulars (group size, funding vehicle, plan design, risk profile of the group, etc.) but it may be worthwhile to investigate giving up grandfather status to achieve the greate good of value based design.

Sorry I could not give you a specific yes/no. Good luck.

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