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What is a grandfathered health plan?

To sum it up...
  • A grandfathered health plan is a health insurance plan that was created or purchased by an individual before March 23, 2010
  • Grandfathered plans typically do not have to meet guidelines and minimum essential coverage requirements set forth by the Affordable Care Act
  • It is possible for your health plan to lose grandfathered status if certain changes are made to the plan
  • If you have group insurance through your employer, you can still enroll in the plan after March 23, 2010, as long as the plan was created before then

What is a grandfathered health plan?

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A grandfathered health plan is any health insurance plan that was put together before March 23, 2010. It can also refer to individual plans that were purchased prior to this date. The Affordable Care Act requires health policies to cover more services. However, grandfathered health plans are excused from these requirements.

Your employer must notify you if the plan they offer is considered grandfathered and you can contact representatives at the United States Department of Health and Human Services for any further questions you might have about what your grandfathered plan entails.

Can I still enroll in a grandfathered plan and can I keep the plan I already have?

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If your employer offers a group plan that has grandfathered status, new employees and dependents can be added to the plan even after the March 2010 deadline. You have the right to keep the plan you already have until 2017, even if it does not meet many of the new Affordable Care Act requirements. However, if your plan loses its grandfathered status, you may be required to switch to a marketplace plan or another policy that meets the minimum essential coverage guidelines.

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Will my plan be granted this grandfathered status forever?

Your plans grandfathered status is subject to change. This can happen if significant adjustments are made to your current grandfathered plan, in which case you will be required to switch to the updated version or a different plan altogether.

If the plan significantly reduces the coverage it offers in regards to treating or diagnosing a particular disorder, it may lose its grandfathered status.

Additionally, raising certain costs associated with the plan can affect its grandfathered status. If coinsurance rates, co-payments, deductibles, and other limits are raised more than the medical inflation amount plus 15 percentage points.

Reducing the amount of employer contribution, adding an annual limit, or changing an employee’s status to affect their coverage without a legitimate reason are all reasons an employer based plan can lose its grandfathered status.

Insurers and employers do have the right to make some changes to the plan without losing their grandfathered status. Changing premiums, making voluntary adjustments that will make the plan more ACA compliant, and allowing new employees and their dependents to enroll in the plan will not force a plan to lose their grandfathered status.

Do I have to keep my grandfathered plan?

No, it is not necessary to keep your grandfathered plan. You have the option to purchase a new insurance plan on the healthcare exchange. You may want to switch to a plan that meets the Affordable Care Act requirements because they must cover pre-existing conditions and more preventative services.

You can enroll in a plan on the Healthcare Marketplace during the open enrollment period, which ends on January 31, 2017. You may also be eligible to enroll during a special enrollment period when your plan ends or loses its grandfathered status.

What services must grandfathered plans cover and what services do they not?

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There are some regulations under the Affordable Care Act that all plans must meet. Your grandfathered plan, like all health plans after the passage of the ACA, must not have any lifetime limits on coverage, cover adult children of the policyholder up until the age of 26, end unpredictable cancellation of coverage, and provide a benefits summary to the policyholder. Additionally, the majority of premium income must be spent on healthcare costs, not administrative fees or similar costs.

Grandfathered plans do not have to offer free preventative services, may not allow you to choose your doctor and have the necessary access to emergency services, will not protect your right to appeal claims or other coverage decisions.

You will also not be protected against significant premium increases through Rate Review if you have a grandfathered plan. Additionally, individual grandfathered plans do not have to cover you for a pre-existing condition or end annual coverage limits.

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