Grandfathered Plans
Plans that were in existence before Obamacare.
What are grandfathered plans ?
Grandfathered health insurance plans are those that were in existence before the Affordable Care Act was signed into law on March 23, 2010 and have stayed basically the same.
They may not include some rights and protections provided under the Affordable Care Act.
A few grandfathered plans still remain. Most are group plans offered by employers. A grandfathered group plan also must have been first established prior to March 23, 2010.
→ September 2023 – HHS, Labor and Treasury departments initiated a rule change which will breath life into grandfathered plans.
Previously, one of the ways an employer group health plan could lose its grandfathered status was if the employer changed issuers – switching from one insurance company to another.
The original regulation only allowed self-funded plans to change third-party administrators without necessarily losing their grandfathered plan status.
♦ September's amendment allows all group health plans to switch insurance companies and shop for the same coverage at a lower cost while maintaining their grandfathered status, so long as the structure of the coverage doesn’t violate one of the other rules for maintaining grandfathered plan status.
The amendment affects insured group health plans.
• A change of issuers in the individual market would still result in the loss of grandfathered status.
Individual grandfathered plans
Individual grandfathered plans cannot enroll new people after March 23, 2010. But insurance companies can continue to offer the same 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.
Over the years these plans have pretty much been replaced.
Job-based grandfathered plans
Job-based grandfathered plans can enroll people after March 23, 2010, and still maintain their grandfathered status if the plans:
• Haven’t been changed in ways that substantially cut benefits or increase costs for plan holders
• Notify plan holders that they have a grandfathered plan
• Have continuously covered at least one person since March 23, 2010.
• Employers with grandfathered group health plans are allowed to enroll new employees in the grandfathered plan.
Protections that apply to all health plans
All health plans, including grandfathered plans, 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) — a short, easy-to-understand summary of what a plan covers and costs
• Spend the majority of premiums on health care, not administrative costs and bonuses
Protections that DON’T apply to grandfathered plans
Grandfathered plans DON'T have to:
• Cover preventive care for free
• Guarantee your right to appeal a coverage decision
• Protect your choice of doctors and access to emergency care
• Be held accountable through Rate Review for excessive premium increases
Protections that DON’T apply to individual grandfathered plans
In addition to the above, grandfathered individual health insurance plans (the kind you buy yourself, not the kind you get from an employer) don’t have to:
• End yearly limits on coverage
• Cover you if you have a pre-existing health condition
Note: Some grandfathered plans offer protections they're not required to. Check with your insurance company or benefits administrator to learn if your grandfathered plan offers the rights and protections listed above.
Can a plan lose its grandfathered status ?
Yes. Plans can lose their grandfathered status if they:
• Significantly cut or lower coverage
• Raise coinsurance
• Significantly raise copayments
• Significantly raise deductibles
• Significantly lower employer contributions
• Add or tighten a yearly limit on what the health plan pays
If you see major changes to your grandfathered job-based health plan's coverage or costs, contact:
Employee Benefits Security Administration, U.S. Department of Labor
866-444-3272
