Effective October 1, 2011 going forward, Anthem Blue Cross Small Group will only issue "non-grandfathered" plans upon renewal. Anthem Blue Cross will no longer offer grandfathered plans beginning at this time.
Background on Grandfathering
Under Health Care Reform, plans that existed before March 23, 2010, and have not made certain changes since then may be considered grandfathered plans. These plans may be exempt from some of the requirements of Health Care Reform.
After Health Care Reform was enacted on March 23, 2010, Anthem Blue Cross chose to grandfather most of the Small Group medical plans in their portfolio. In most cases, for 2010 through early 2011 renewals, Anthem Blue Cross assumed that customers would keep their existing plan(s) and maintain grandfathered status.
Lack of Interest Grandfathering
Since that time, however, Anthem Blue Cross has not seen a real market interest in retaining grandfathered status. Why?
Some customers cite the constraints it puts on managing costs through buy-downs.
Others want to give members full access to health care reform's additional benefits via a non-grandfathered plan.
There are also many complexities to remaining grandfathered, and groups may have made changes in 2010 or 2011 that might impact their ability to remain grandfathered going forward.
Some Additional Reasons for this Change
- Based on Anthem's analysis, the majority of their small groups will be on non-grandfathered plans by the end of this year.
- There is administrative complexity in offering various plans and portfolios (with grandfathered and non-grandfathered options), and Anthem wants to make their offerings as simple as possible to the marketplace. For instance, quoting of renewals for agents is simplified when the portfolios and options for each group aren't so numerous.
- The non-grandfathered plans will be a more affordable option due to benefit adjustments Anthem can make.
- By only offering non-grandfathered plans, Anthem expects to gain greater efficiency and some cost savings, which ultimately affects the cost of their products.
- As other major carriers have already made the change not to offer grandfathered products in the California Small Group market, this change is consistent with the marketplace direction on grandfathering.
For the above reasons, Anthem has decided to take a new, standard approach toward grandfathering for Small Group health plans. They will issue Small Group renewals on non-grandfathered products only, beginning on or after October 1, 2011.
beere&purves will continue to work closely with Anthem Blue Cross to deliver news to our brokers partners as they continue to implement Health Care Reform.