John Hickman was quoted in a Health Plan Week article discussing how many employers have expressed interest in offering defined-contribution plans to workers and how some employee benefits advisors and consultants believe that few companies will adopt this strategy in time for the 2012 plan year for active workers.
“There are several regulatory concerns that may make employers hesitant to open defined-contribution plans,” Hickman said.
Hickman also noted that it is unclear under the health reform law whether health reimbursement arrangements (HRAs) are going to satisfy the law’s stipulation that there are no annual caps on benefits.
“There’s some concern that [HHS] is going to stick to some preliminary guidance, where stand-alone HRAs wouldn’t be allowed,” he said.
According to the article, other regulatory issues are whether fixed-dollar contributions are considered credible coverage for “pay or play” purposes and that it’s unclear whether making defined-contribution coverage available would disqualify a low-paid employee from eligibility for subsidies.
“I think all of those issues are gray areas and will need to be resolved before this really takes off,” Hickman added. “From an economic perspective, it’s a wonderful idea.”
“There are several regulatory concerns that may make employers hesitant to open defined-contribution plans,” Hickman said.
Hickman also noted that it is unclear under the health reform law whether health reimbursement arrangements (HRAs) are going to satisfy the law’s stipulation that there are no annual caps on benefits.
“There’s some concern that [HHS] is going to stick to some preliminary guidance, where stand-alone HRAs wouldn’t be allowed,” he said.
According to the article, other regulatory issues are whether fixed-dollar contributions are considered credible coverage for “pay or play” purposes and that it’s unclear whether making defined-contribution coverage available would disqualify a low-paid employee from eligibility for subsidies.
“I think all of those issues are gray areas and will need to be resolved before this really takes off,” Hickman added. “From an economic perspective, it’s a wonderful idea.”