to a formula, such as hours worked, the contribution rate is the formula. Example: If the COBRA cost of single coverage under a benefit package option offered under a Plan on March 23, 2010 is $5000 and the employees contribute $1000, your contribution rate for March 23, 2010 is 80%. Assume that the COBRA cost in 2014 for single coverage is still $5000 but the employee's share is now $1250 instead of 1000 (meaning, you contribute 3750 instead of 4000). Your contribution rate on January 1, 2014 in this example is 75%. You do not lose grandfather plan status because the contribution rate, expressed as a percentage, did not decrease by more than 5% percentage points from the contribution rate in effect on March 23, 2010 (80%) even though your actual contribution, expressed as a Ethicare_Ad_05_01.pdf 1 12/8/10 dollar amount, decreased by 6.2% from
in the regulations as resulting in loss
the dollar amount on March 23, 2010. •
Changes in annual limits: The addition of an overall annual limit on the dollar value of benefits to a grandfathered plan that did not impose an overall annual or lifetime dollar limit on March 23, 2010, result in loss of grandfather status. If a grandfathered plan that had only a lifetime dollar limit on March 23, 2010 is modified to add an annual dollar limit on benefits, grandfather status is lost unless the annual limit is not less that the lifetime limit. If a grandfather plan lowers an annual dollar limit on benefits below the limit in effect on March 23, 2010, grandfather status is lost.
of grandfather status do not affect the grandfather. Changes to voluntarily comply with PPACA and changes in third party administrators do not result in loss of grandfather status. n
According to the preamble, changes other than those described
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Don’t Use EthiCare Advisors... • If you’re impressed that a dialysis provider would offer a 15% discount on top of their already “low” charges
C
• If you feel that paying 25% of savings (or more) is good for the economy
M
Y
CM
• If you would rather deal with a company that has no idea what an MGU, TPA or Reinsurance is
MY
CY
CMY
K
• If you don’t mind paying $48 for a mucus removal device, otherwise known as a tissue
If you don’t want to save money on claims, don’t call us! • If you would rather deal with a company that has no idea what an MGU, TPA (888)838-4422 350 Clark Dr, Ste 104 or reinsurance is Budd Lake, NJ 07828 www.ethicareadvisors.com • If you don’t want to be like everyone else
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January 2011
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