Common Questions under the Health Care Reform Laws – Part 10

April 10, 2011    

By Larry Grudizen, Attorney at Law

One of my clients sponsors a wellness program.  If an employee participates in the program, his or her group medical coverage premium will be reduced from 10% to 15%.  If for any year, an employee does qualify for the discount under the wellness program and his or her premium increases 10% to 15%, will such an increase affect the grandfathered status of the employer’s group medical plan? 

Yes. The various federal agencies caution that penalties related to wellness programs (such as cost-sharing surcharges) should be examined carefully as they could jeopardize the plan’s grandfather status-for example, by decreasing the employer’s contribution percentage by more than 5 percentage points below the contribution rate on March 23, 2010.