Hewitt Survey: Employer Reaction to Health Care Reform: Grandfathered Status

MyHealthGuide Source: Hewitt, 8/2010, Hewitt Survey Report

Grandfathered health plans are only required to comply with certain provisions of the recently enacted health care reform law. In July 2010, Hewitt Associates conducted a brief survey of more than 450 U.S. companies representing 6.9 million employees to determine how these provisions will affect companies health plans and their grandfathered status. 

Survey findings

  • 73% of surveyed companies have
    • determined whether their group health plans will be grandfathered in 2011, and
    • the recently released guidance on preventive care did not impact their decision to maintain grandfathered status.
  • 90% anticipate losing grandfathered status by 2014, with the majority expecting to do so in the next Iwo years.
  • Employers indicated that they would most likely lose grandfathered status because of
    • 72% – plan design changes
    • 39% – changes to company subsidy levels
    • 16% – consolidation of health plans
    • 16% – changes to insurance carriers
    • 15% – union negotiations
  • Loss of Grandfathered Status Among Self-Insured Medical Plans
    • 51% grandfather status loss in 2011
    • 21% loss in 2012
    • 8% loss in 2013
    • 8% loss in 2014
    • 12% do not expect to lose grandfather status
  • Addressing additional cost associated with the new health care reform coverage and benefits requirements starting in 2011,
    • 46% said they will pass the additional costs to employees.
    • 45% of companies have not determined how to handle these costs yet.
    • 9% said they will absorb additional costs.


Most employers would rather have the flexibility to change their benefit programs than be restricted to the limited modifications allowed under the new law.

Editor’s Note: Beware of insurance agents and consultants using scare tactics – losing grandfather status by implementing needed benefit / carrier changes.