David Weiner Quoted in SHRM Online
“Some Executive Health Care Benefits Might Become Obsolete"

David Weiner was quoted in the June 4, 2010 SHRM Online article, “Some Executive Health Care Benefits Might Become Obsolete.” The article discussed the nondiscrimination requirement that will apply to new fully funded health care plans as a result of the Patient Protection and Affordable Care Act (PPACA) and the impact it will have on benefits for highly paid executives. According to the article, the nondiscrimination requirement mandates that a new, fully-funded health care plan cannot discriminate in favor of highly compensated individuals as to eligibility to participate in the plan or discriminate on the level of benefits that are provided to them.

David noted that the nondiscrimination requirement actually does not mean that employers cannot discriminate at all. Instead, “the extent of discrimination can’t exceed rules similar to the rules applicable to retirement plans. So an insured plan can exclude some non-high-paids, depending on how many high-paids are excluded, and based on whether there are valid business criteria defining who is covered and who is not.” David added that there are rules allowing short-term and seasonal workers to be excluded. He cautioned, however, that the rules apply “on a controlled group basis, so you have to look across all related businesses.”  He further noted that for small companies, the nondiscrimination requirement “could require them to cover more low-paid employees in their plan, even though it’s not executive-only.”

The article pointed out that grandfathered plans won’t have to satisfy this requirement, but there are still many unanswered questions about when a group health plan in existence on March 23, 2010 loses its grandfathered status.