“Grandfathered” Plans – Then & Now

insurance for nonprofits“If you like your health plan, you can keep it.” That is what President Obama assured Americans during the health reform debate. The “grandfather” rule of the Affordable Care Act (ACA) allows businesses and consumers to keep their current coverage while still benefiting from some of the new consumer protection provisions of the ACA. So what does this mean for employers, exactly?

If you are a business owner who provides employer-sponsored healthcare coverage and your plan was in effect on March 23, 2010 (and covered at least one individual continuously since then), and you decided to keep your plan, your plan is considered a “grandfathered” plan. This means that it remains the same, except it now includes a few new provisions. Your plan can no longer have lifetime limits on coverage; it can no longer include “rescissions” of coverage when employees get sick; and finally, it must be extended to policy holders’ children until they reach the age of 26 years old.

Certain consumer protections, however, are exempted in grandfathered plans. First, grandfathered plans do not have to provide free preventive services. Second, they do not have to offer the new protections when appealing coverage denials or claims. And third, they do not have to protect a consumer’s choice of healthcare providers and access to emergency care.

The grandfather rule also allows employers to make routine changes to their group healthcare plan without losing grandfather status.

“These routine changes include cost adjustments to keep pace with medical inflation, adding new benefits, making modest adjustments to existing benefits, voluntarily adopting new consumer protections under the new law, or making changes to comply with state or other Federal laws.” (HealthReform.gov)

The only way you lose your grandfathered status is if you make major changes to your plan, such as removing benefits or increasing what your employees pay out-of-pocket.

Do you have a grandfathered plan? How has it been working out for you and your company? Share your experience in a comment below! If you are confused about your grandfathered plan or the ACA in general, contact us at 1-866-481-5262.



Photo via Stuart Miles / FreeDigitalPhotos.net

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