Editor’s note: This page was updated in 2018, after a new extension was issued by the federal government. As states issue regulations indicating whether they’ll go along with the new extension, we’ll continue to update this page.
If your current health insurance policy is not grandfathered but was in effect prior to 2014, your plan is considered a transitional, or “grandmothered” policy. These plans are not fully ACA-compliant, and were purchased between March 23, 2010 – when the ACA was signed into law – and October 1, 2013 (in some states, policies purchased through December 31, 2013, are considered grandmothered).
They are different from grandfathered plans, which are policies that were already in force on March 23, 2010. Grandfathered policies are allowed to remain in force indefinitely, without having to become fully compliant with the ACA, as long as they don’t make changes that would substantially cut benefits or increase costs for insureds. Although most of the ACA’s regulations do not apply to grandfathered plans, they do have to adhere to some provisions of the healthcare reform law.
Nobody has been able to purchase a grandmothered plan since the end of 2013, although new employees can still join grandmothered plans that were purchased by a small group prior to the end of 2013, if the plan is still in force (since the purchaser is the employer, rather than the employee).
What grandmothered plans must cover
Grandmothered plans must to comply with more ACA regulations than grandfathered plans. These include covering preventive care with no cost-sharing, and eliminating annual benefit limits for any essential health benefits (EHBs) that the plan covers (grandmothered plans are not required to cover EHBs other than preventive care, but if they do provide coverage, they cannot place an annual dollar limit on it).
Individual grandmothered plans must also comply with mental health parity rules starting with plan years that began on or after July 1, 2014. In addition, in the small group market, grandmothered plans cannot have pre-existing condition exclusions, or benefit waiting periods that exceed 90 days. But in both the individual and small group market, grandmothered plans are exempt from some of the main consumer protections and mandates in the ACA, most of which went into effect on January 1, 2014.
How grandmothered plans came about
There was nearly a four year gap between the passage of the ACA and the bulk of the implementation at the start of 2014. During that time, hundreds of thousands of new individual and small group policies were sold. Originally, the plan was that all existing, non-grandfathered policies (ie, the ones that had become effective after March 23, 2010) would have to be swapped for ACA-compliant coverage as January 1, 2014, or in some states, as of their 2014 renewal date.
Then in the fall of 2013, the Obama Administration announced a transitional relief program that would let states and carriers allow these individual and small group policies to early renew at the end of 2013 (regardless of when the plans’ original renewal date would have been) and remain in force until their new renewal date in late 2014. This provision had already been adopted by some states prior to the federal announcement, but the HHS announcement caused many states to reexamine the issue.
This was seen by some as an unfortunate loophole, and a few states had already taken steps in the summer of 2013 to prohibit early renewal. But many states and carriers accepted the new guidelines.
Four more extensions; final expiration date = December 2019
In March 2014, HHS extended the transitional relief, permitting renewals as late as October 1, 2016, with the plans allowed to remain in force until as late as September 30, 2017. Grandmothered plans that were renewed in late 2013 and scheduled to expire in late 2014 (under the terms of the initial transitional relief) were eligible to be renewed instead, if the state and the insurance carrier allowed it. In many states, those plans were once again eligible for renewal in late 2015.
Another extension was issued in February 2016, allowing grandmothered plans to continue to renew up until October 1, 2017, but with a termination date no later than December 31, 2017 (carriers can use plan years of less than 12 months, or early renewal as of January 1, 2017 in order to make this work). As was the case with previous extensions, this one is also subject to the discretion of states and health insurance carriers.
Another extension was issued in February 2017, allowing — at each state’s discretion — grandmothered plans to renew until as late as October 1, 2018, as long as they terminate no later than December 31, 2018.
And yet another extension was issued in April 2018, allowing — again, at each state’s discretion — grandmothered plans to renew until as late as October 1, 2019, as long as they terminate by the end of 2019. The details are the same as the previous extensions that have been issued, but with the deadlines pushed out another year.
As was the case in prior years, states will have the final say in terms of whether grandmothered plans can be renewed. And in states where grandmothered plans are allowed to renew, it will be up to each insurer to determine whether to offer those plans for renewal. Grandmothered plans tend to have healthier membership than ACA-compliant plans, as the people enrolled in those plans went through medical underwriting at the time the policy was purchased. But over time, that underwriting “wears off” as health conditions can crop up in people who were previously healthy. And as the risk pool shrinks over time, the administration of grandmothered plans may not be worthwhile to insurers (remember, the number of people with grandmothered plans goes down each year, because new enrollees can no longer purchase those plans — people can only exit the pool, but cannot join). So as has been the case in previous years, it’s possible that some insurers might decline to renew grandmothered plans for 2019, even in states that allow renewal.
The new extension will align the termination date of grandmothered plans with the open enrollment period for 2020 coverage. If states agree to the latest extension, grandmothered plans will be eligible for renewal throughout 2018 and most of 2019 (up until October 1, 2019). But they must terminate by the end of 2019, regardless of their renewal date.
The provision allowing grandmothered plans to renew up until October 1, 2019 (instead of October 1, 2018) will be particularly helpful for people with grandmothered plans that have renewal dates between October 2 and December 31, and who wish to keep their coverage in 2019. Without the extension that HHS issued in April 2018, all of those plans would have had to terminate in late 2018, as their renewal date would have been after October 1, 2018. With the new extension — assuming states and carriers agree to allow it — those plans will instead be eligible for renewal in late 2017, and will be able to remain in force in 2018.
But by the end of 2019, assuming CMS doesn’t issue another extension, all non-grandfathered health plans that are not yet fully compliant with the ACA will have to be replaced with ACA-compliant coverage, purchased either on or off-exchange.
Extensions are controversial
The extension of grandmothered plans is controversial. People who have those plans want to be allowed to keep them, since they tend to have lower premiums than ACA-compliant plans. This is due to the fact that the enrollees were subject to medical underwriting when they applied for coverage, and the fact that benefits don’t have to be up to the standards set by the ACA.
But when those plans are allowed to continue, the relatively healthy population covered by them is kept out of the ACA-compliant risk pool. Since there’s no medical underwriting for ACA-compliant plans (meaning that medical history is not an eligibility factor), the population covered by new plans tends to be considerably sicker than the population that used to be covered in the individual market (ie, the people who are still on grandmothered plans). The result is less stability in the ACA-compliant individual market, which translates to higher premiums and fewer insurers offering coverage.
States allowing renewals of grandmother plans
The transitional relief program leaves the final decisions up to states and carriers. Each state had to decide whether it would allow grandmothered policies to renew again after January 1, 2014, and whether they will now allow those renewals to continue as late as October 2019 (with coverage allowed to remain in force through the end of 2019). If a state agrees to allow transitional plans to continue to renew, the final decision is left to the carriers to determine whether to offer those policies for renewal (so it’s possible to have a state where there are no longer any grandmothered plans in force, despite state regulations allowing them to renew).
35 states have allowed grandmothered plans to remain in force in 2018, and most of them will likely follow the latest extension from CMS, allowing grandmothered plans to remain in force in 2019 as well. In at least four of those states, however, there are no longer any grandmothered plans remaining in the individual market, as insurers have opted to transition to ACA-compliant plans instead.
Grandmothered plans can still exist in 2018 — and likely in 2019 — in the following states (As states consider and respond to the latest extension, we’ll update this page with new regulations; for states where the extension through 2019 is being allowed, the extension date will be printed in bold font):
- Alabama (plans can remain in force until December 2018. However, Blue Cross Blue Shield, which had 91% of the individual market in Alabama in 2013, decided not to renew noncompliant plans into 2014)
- Alaska (plans can remain in force through December 2018). Premera is the only carrier in Alaska’s individual market that still has grandmothered plans (and became the only carrier in the state’s individual market altogether as of 2017). They had planned to terminate their grandmothered plans at the end of 2016, but then decided to allow them to renew for one more year, through the end of 2017. The Alaska Division of Insurance confirmed in September 2017 that in light of the latest extension from the federal government, they expect Premera to renew remaining grandmothered plans one more time, through 2018. They noted that there are fewer than 2,000 people who still have grandmothered individual market plans in Alaska.
- Arizona (plans can remain in force through December 2018)
- Arkansas (plans can remain in force through December 2018; the Arkansas Insurance Department confirmed by phone that the state is going along with the February 2017 extension issued by CMS).
- Florida (plans can remain in force through December 2018; no bulletin has been issued regarding the extension through 2018, but the Florida Office of Insurance Regulation confirmed by phone that insurers may extend plans in accordance with the latest CMS guidelines).
- Georgia (plans can remain in force through December 2018; the state did not issue any official guidance on the more recent extensions, but instead communicated the information directly to the health insurance carriers)
- Hawaii (plans can remain in force through December 2018, but must be renewed by December 31, 2017; no renewals in 2018 are allowed under the state’s guidance).
- Idaho (plans can remain in force through December 2018. Pursuant to a 2016 bulletin from the Idaho Department of Insurance, all grandmothered plan renewals on or after August 1, 2016 have policy periods that extend through December 2017, with a consistent premium. So a plan that renewed on August 1, 2016 was renewed for a period of 17 months, with no rate changes during that time. Idaho has also addressed how accumulation periods for out-of-pocket costs will work on renewed grandmothered plans. In going along with the latest extension, allowing plans to remain in force through the end of 2018, Idaho regulators noted that all grandmothered plans that remain in force in 2018 would be on calendar-year renewal schedules, as their previous renewals would have been through December 31, 2017; they were simply allowed to renew for one more full year after the end of 2017)
- Illinois (plans can remain in force through December 2018. Health plans cannot impose additional cost-sharing or premium increases in the final months of 2017; the renewal rates and out-of-pocket amounts that apply to the final renewal must be extended through the end of 2017 if the plan remains in force through the end of 2017)
- Indiana (plans can remain in force through December 2018)
- Iowa (plans can remain in force through December 2018)
- Kansas (plans can remain in force through December 2017. The Kansas Insurance Department confirmed by phone that they would allow plans to renew according to the February 2016 CMS guidance)
- Kentucky (plans can remain in force through December 2018; some carriers had previously indicated that they would not allow grandmothered plans to extend beyond their 2014 renewal date).
- Louisiana (plans can remain in force through December 2018)
- Michigan (plans can remain in force through December 2018)
- Mississippi (plans can remain in force through December 2018; the Mississippi Insurance Department was enthusiastic and immediate in their support for the latest extension).
- Missouri (plans can remain in force through December 2018; the Missouri Department of Insurance had not issued further official guidance on transitional plans, but did provide a letter to Blue Cross Blue Shield of Kansas City regarding the insurer’s intent to exit the ACA-compliant individual market in Missouri while continuing to renew grandmothered and grandfathered plans for 2018)
- Nebraska (plans can remain in force through December 2018)
- New Hampshire (plans can remain in force through December 2018, but only if they are renewed on or before January 1, 2018; no transitional plan renewals will be allowed after January 1, 2018 – plans will have to terminate and be replaced with ACA-compliant coverage as of their first renewal after January 1, 2018, as New Hampshire law does not allow for partial year renewals).
- New Jersey (plans can remain in force through December 2018)
- North Carolina (plans can remain in force through December 2018; Blue Cross Blue Shield of North Carolina had about 161,000 people with grandmothered plans as of the end of 2013 — when those plans first became “grandmothered” — but that number had dropped to 50,000 by 2017).
- North Dakota (plans can remain in force through December 2018; no additional bulletins were issued, but the ND Insurance Department confirmed that the state will follow the latest guidance from CMS. However, Blue Cross Blue Shield of North Dakota terminated all of their grandmothered plans prior to 2015, and they had more than three-quarters of the individual market as of 2013, under the name Noridian).
- Ohio (plans can remain in force through December 2018)
- Oklahoma (plans can remain in force through December 2018)
- Pennsylvania (plans can remain in force through December 2018. Pennsylvania has not issued an official bulletin regarding the availability of an extension through December 2018, but the Pennsylvania Insurance Department confirmed by phone that the plans can be renewed again for 2018.
- South Carolina (plans can remain in force through December 2018; 11 carriers opted to go along with the initial transitional relief in 2013, seven in the individual market, and six in the small group market).
- South Dakota (plans can remain in force through December 2018)
- Texas (plans can remain in force through December 2018)
- Utah (plans can remain in force through December 2018; Utah code 31A-30-117(3) allows non-grandfathered health plans to remain in force “to the extent permitted by the Centers for Medicare and Medicaid Services”, so the extension issued by CMS in February 2017 is applicable in Utah).
- Virginia (plans can remain in force through December 2018. Legislation was passed in November 2014 that allowed for the renewal of non-ACA-compliant plans according to CMS guidance, but as it was very late in the year by that point, most carriers did not reverse course and allow those plans to renew for 2015. Golden Rule did, although the Bureau of Insurance noted that they were the only individual carrier to do so, and their enrollment is small; the Bureau of Insurance did say that some small group carriers may have extended transitional plans in the state, but they don’t track that).
- Wisconsin (plans can remain in force through December 2018)
- Wyoming (Plans can remain in force through December 2018; Wyoming did not issue a written statement, but the Wyoming Insurance Department confirmed that grandmothered plans can continue to renew).
States where renewals are permitted but there are no longer any grandmothered plans in the individual market
- Maine (grandmothered small group plans can remain in place through December 2018. There are no longer any grandmothered individual market plans in Maine; Anthem was the only individual market carrier in Maine carrier with grandmothered plans prior to 2017, and they discontinued those plans at the end of 2016).
- Montana (state regulators didn’t prohibit renewal of grandmothered plans, although they did encourage carriers to switch to ACA-compliant plans instead of renewing grandmothered plans. Ultimately, all individual market carriers decided to switch to ACA-compliant plans, so there are no grandmothered plans in Montana)
- Tennessee (Department of Commerce and Insurance confirmed that plans can remain in force through December 2018. However BCBS, which insured 42% of the individual market in 2013, only renewed grandmothered plans through 2014. And notably, BCBSTN also terminated their grandfathered individual market plans at the end of 2015. The Tennessee Department of Commerce and Insurance confirmed that there are no longer any grandmothered individual market plans in the state as of 2017).
- West Virginia (the WV Office of the Insurance Commissioner confirmed by email that West Virginia is allowing small group transitional plans to remain in force until as late as December 31, 2018, but only if they were renewed by January 2018. Renewals are not permitted after January 2018. There are no longer any transitional individual market plans in West Virginia, as carriers have terminated those plans and replaced them with ACA-compliant plans instead. The state also filed a lawsuit against HHS over the extension of transitional plans in 2014. But a US Court of Appeals ruling in July 2016 found that WV lacked standing in the case.
States not permitting renewals of grandmothered plans
Fifteen states and the District of Columbia have not extended renewals of non-ACA-compliant plans. In most cases, this was effective as of 2014, although Oregon and Colorado allowed grandmothered plans to remain in force through the end of 2015).
- California (grandmothered small group plans were allowed to remain in force through the end of 2015).
- Colorado (The state allowed renewal through 2015, but not into 2016.)
- Connecticut (CT’s insurance commissioner confirmed the state made no changes after the March 2014 announcement from HHS.)
- District of Columbia
- Minnesota (Non-grandfathered plans were required to be updated in order to become compliant with the ACA as of January 1, 2014. Carriers in Minnesota were not permitted to cancel coverage unless they left the market entirely.)
- New Mexico (plans could not be renewed after the end of 2014, but could continue to exist until their 2015 renewal date. At that point, they had to be replaced with an ACA-compliant plan)
- New York
- Oregon (Grandmothered plans could only remain in force through December 31, 2015.)
- Rhode Island
- Vermont (The state allowed 2013 plans to be extended only briefly, until March 31, 2014.)
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.