Grandfather Plans Guidelines

      Under the healthcare reform law, Individual and/or Families have the right to keep coverage they had as of March 23, 2010 or before and are exempt from many reforms.   These Individual and/or Family plans are considered “grandfathered plans”.    Knowing when the law applies is important.   So it’s important to understand when a plan is “grandfathered”.

Grandfathered plans:  Plans that existed on or before March 23, 2010 the date the law took effect and that continue after that date are considered “grandfathered” plans.   This means the plans may be exempt from some of the requirements of the Affordable Care Act (Obamacare) reform law.   However, certain requirements apply to ALL plans, whether they’re grandfathered or not.

The following requirements apply to ALL plans:

  • No lifetime benefits maximum limits
  • Dependent coverage for adult children up to age 26
  • No annual limits on certain types of benefits
  • No pre-existing conditions exclusions for children under age 19

If certain changes in coverage are made after the law’s effective date, the plan will likely not be a grandfather plan.   This means the plan must also include the following:

  • 100% coverage for preventive care in network
  • No prior authorization for emergency services or higher cost-sharing for out-of-network emergency services

Keeping grandfather status:   According to the Affordable Care Act guidelines, there is some flexibility to modify a plan without losing grandfather status.   This includes:

  • Changes to comply with federal or state laws
  • Routine premium changes of a policy or plan to keep pace with medical inflation
  • Adding new benefits and making modest adjustments to existing benefits
  • Changes to voluntarily comply with the Affordable Care Act reform law.
  • Change in third-party administrators
  • Changes in premiums

Losing grandfather status:   The following changes to a plan will result in the loss of grandfathered status:

  • Eliminating all (or substantially all) benefits to diagnose or treat a particular condition
  • Increasing coinsurance by any amount above the level set on March 23, 2010
  • Increasing fixed amount cost sharing (other than co-pays) more than the sum of medical inflation plus 15 percentage points from the level of March 23, 2010
  • Increasing co-pays by an amount that exceeds the greater of 1) a total percentage (measured from March 23, 2010) that is more than the sum of medical inflation plus 15 percentage points, or 2) $5 multiplied by medical inflation, plus $5
  • Reducing an overall annual dollar limit or adding a new overall annual dollar limit, compared with what was in effect on March 23, 2010
  • Ensuring that consumers switch to a grandfathered plan that, compared with the current plan, has fewer benefits or higher cost sharing as a means of avoiding new consumer protections
  • Buying and/or merging with another plan to avoid complying with the Affordable Care Act reform law.