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Grandfathered Health Plans - What You Need to Know in 2014

January 17, 2014
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Grandfathered health plans are those that were in existence on March 23, 2010 and have not been changed in ways that substantially reduce benefits or increase costs for policy holders. Here's what employers and consumers need to know about grandfathered health plans in 2014.grandfathered_health_plans

Two Types of Grandfathered Health Plans

There are two types of grandfathered health plans: job-based plans and individual plans.

  • Job-based grandfathered plans can enroll people after March 23, 2010 and still maintain their grandfathered status. They can do this as long as the plans haven’t been changed in ways that substantially cut benefits or increase costs for consumers - and have continuously covered at least one person since March 23, 2010.

  • Individual grandfathered plans cannot newly enroll people after March 23, 2010 and have that new enrollment be considered a grandfathered policy. But insurance companies can continue to offer the grandfathered plans to people who were enrolled before that date. An insurance company can also decide to stop offering a grandfathered plan. If it does, it must provide notice 90 days before the plan ends and offer enrollees other available coverage options. 

What's the Difference Between Grandfathered and Non-Grandfathered Health Plans?

Grandfathered health plans do not need to meet all of the new requirements of the Affordable Care Act.

All health plans (grandfathered and non-grandfathered) must:

  • End lifetime limits on coverage

  • End arbitrary cancellations of health coverage

  • Cover adult children up to age 26

  • Provide a Summary of Benefits and Coverage (SBC)

  • Have a minimum amount of the premium they collect go toward medical claims and clinical expenses (aka their Medical Loss Ratio)

Grandfathered plans do not have to:

  • Cover preventive care for free

  • Guarantee your right to appeal

  • Protect your choice of doctors and access to emergency care

  • Be held accountable through rate review for excessive premium increases

In addition to the above, grandfathered individual health plans (the kind you buy yourself, not the kind you get from an employer) do not have to:

  • End yearly limits on coverage

  • Cover individuals with a pre-existing health condition

Do I Have a Grandfathered Plan?

  • Check your health plan materials: Health plans must disclose if they are grandfathered in all materials describing plan benefits.

  • Check with your employer or your health plan's benefits administrator.

Click here to read the fact sheet from healthcare.gov.

What questions do you have about grandfathered health plans in 2014? Leave a comment or question below.

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