While we have not heard it first-hand, we have heard through the grapevine that some insurance carriers are out there offering to their clients the ability to “renew early.” Part of the strategy is, apparently, to delay the application of health care reform provisions. The following discussion addresses some risks associated with reliance on such a strategy as a means of complying with the employer mandate and the insurance mandates.
EMPLOYER MANDATE: At the outset, let’s be clear about one fact: this does not get an employer out of play or pay. The employer mandate rules specifically say that a plan year can only be changed for a valid business purpose and that, in this case, avoiding the shared responsibility tax is not a valid business purpose. Renewing early is (assuming other legal niceties are satisfied) a change in plan year. Without a business purpose,