The Affordable Care Act created a new set of minimum requirements for health insurance plans. These minimum requirements are known as the Essential Health Benefits a plan must have in order to be sold in the United States. However, there were exemptions given to health plans that were in existence on or prior to March 23, 2010. Plans that have these exemptions on meeting the requirements of the Affordable Care Act are known as "grandfathered health plans."
Retiree health plans (i.e. plans whose membership are limited to retired employees of the sponsor with no active employees enrolled in the plan) are also exempt to the requirements of the Affordable Care Act. Dental plans, Medicare Supplement plans, and Long Term Care plans are also exempted from the requirements of the Affordable Care Act.
Not necessarily. Determinations are made at the benefit level within a plan, not at the plan level. This means that some benefits within your health plan may be grandfathered while others may not and, as a consequence, meet the new standards of the Affordable Care Act. For example, even grandfathered health plans must comply with the following benefits regardless of their benefits at the time of grandfathering:
Many consumers are concerned that there current health plan may be discontinued. The first step in determining whether you can stay in your plan is to contact your insurer and ask if your plan is grandfathered. If it is grandfathered, ask if the insurer expects the plan to remain grandfathered in 2014.
There is no clear answer to that question. Since grandfathered status is determined by the plan’s adherence to government regulations, the plan’s grandfathered status can be lost due to noncompliance. There is no official limit to how long a plan may remain grandfathered. The chart to the right illustrates a decrease in employees covered by grandfathered health plans between 2011 and 2012.
A health plan can lose its grandfather status for a variety of reasons. For example, grandfathered status will be lost if the insurance company:
Additionally, a plan can also lose its grandfathered status if its sponsor (i.e. an employer or employee organization):
If your plan loses its grandfathered status, you will need to enroll in a qualified health plan during the next applicable enrollment period.
New enrollment in a grandfathered group health plan is limited to family members of existing enrollees and new employees of the grandfathered plan’s sponsor. New enrollment in a grandfathered individual health plan is limited to family members of existing enrollees.
HealthPocket is a free information source designed to help consumers find medical coverage. Whether you are looking for Medicare, Medicaid or an individual health insurance plan, we will help you find the right healthcare option and save on your out of pocket healthcare costs. We receive our data from government, non-profit and private sources, and you should confirm key provisions of your coverage with your selected health plan. If you select a plan presented on our site, you will be directed (via a click or a call) to one of our partners who can help you with your application. Our website is not a health insurance agency and not affiliated with and does not represent or endorse any health plan. HealthPocket, Inc. is a wholly owned subsidiary of Health Plan Intermediaries Holdings LLC (NASDAQ: HIIQ)