Since the opening of the state and federal health insurance marketplace on October 1, 2013, you have probably been hearing a lot about “grandfathered” health plans. While chaos surrounds the Healthcare.gov website making enrollment difficult, many consumers are also being informed that their individual health plans have been canceled as others have been allowed to keep their plans into 2014. Individuals and businesses who have “grandfathered” plans will be allowed to keep their plans (at least in 2014), and those who do not have “grandfathered” plans will need to find a new plan.
How Does the ACA Define a Grandfathered Plan?
Some group health plans that were created—or individual health insurance policies that were purchased—on or before March 23, 2010 may be exempt from many of the changes required by the Affordable Care Act. These plans are called grandfathered plans.
Health insurance plans that existed on March 23, 2010 are eligible for grandfathered status. If they are grandfathered, they do not have to meet all of the requirements of the law. But if an insurance company, employer or individual has made significant changes to a plan’s benefits or how much members pay in premiums, copays or deductibles, the plan is not eligible for grandfathered status. If your plan is not grandfathered, all of the new consumer provisions of the ACA will apply to the new plan you choose (or are offered by your employer) when the new plan year begins.
Both individual and group health plans (employer-provided) can be grandfathered.
Grandfathered Health Plans Are Exempt from Certain ACA Requirements
Grandfathered health plans are exempt from certain requirements of the ACA, but they do have to comply with some of the new “consumer protections” within the law.
All health plans, regardless of grandfathered status, must:
- End lifetime limits
- End arbitrary cancellations
- Cover adult children up to age 26
- Provide a Summary of Benefits and Coverage (a short, easy to understand summary of coverage and costs)
- Spend a certain percentage of premiums on health care, rather than administrative costs and bonuses
Grandfathered health plans (both employer-sponsored group plans and individual plans) are exempt from the requirements to:
- Cover preventive care for free
- Provide a package of essential health benefits that new or non-grandfathered individual and small group plans must offer beginning in 2014
Individual health plans that are grandfathered do not have to:
- End yearly limits on coverage
- Cover you if you have a pre-existing condition
Is My Plan Grandfathered? How Do I Know?
A health plan must disclose in its plan materials whether it is a grandfathered plan, and it must also advise consumers on how to contact the U.S. Department of Labor or the U.S. Department of Health and Human Services. If you have an individual health plan that has not been grandfathered for 2014, you should have already received or will soon be receiving a cancellation notice from your insurance company. You will be directed to a new plan offered by your carrier, where applicable. We can help you find an appropriate new plan that fits your needs. We can work directly with insurance companies, or we can help you navigate the health insurance marketplace.
If you have an employer-provided group health plan, direct your questions to your company’s human resources department. Or, if your employer is no longer offering health insurance for 2014, contact us for help finding an individual health plan for you and your family. Remember, you are required to have health insurance in 2014, or you must pay a penalty.
Do you have an individual or group health plan that has been recently cancelled? Do you know if you have a grandfathered plan? Contact RW Insurance today for all of your health insurance needs and for help navigating all of the new rules.
