We earn too much to qualify for a premium subsidy and our existing plan costs less than exchange plans. Can we keep it?

Q. My wife and I earn a total of $94,000 a year, and we have one child. I know we don’t qualify for a subsidy in the exchange, since our income is more than 400 percent of poverty level. We’re both self employed, and we’ve had individual health insurance for years. We’re very healthy, so we’ve always qualified for medically underwritten coverage. So far, we’ve had the option to keep our pre-2014 policy, and since we don’t qualify for a subsidy, that has been our best option. But how long will we be able to keep our current plan? Are we going to be forced to switch to an ACA-compliant plan instead?

A. It depends on whether your current plan is grandfathered or grandmothered (transitional), and whether your carrier continues to offer your plan.

If you’ve had your plan since before March 23, 2010 and it’s remained substantially unchanged, it’s grandfathered, and you can theoretically keep it indefinitely. But that might end up getting expensive as rates go up over time, and your carrier might decide to terminate its grandfathered plans and replace them with ACA-compliant plans instead.

If you got your plan after March 23, 2010, but before the exchanges opened for business on October 1, 2013, your health plan is grandmothered. These plans weren’t originally supposed to exist past their renewal date in 2014, but they’ve been granted several extensions by CMS, and 35 states have agreed to go along with the extensions. The final extension allows grandmothered plans to remain in effect until as late as Decmeber 31, 2017. But in states that allow grandmothered plans to continue to exist, carriers are free to make their own decision regarding the continuation of those plans – they can opt to cancel them and replace them with ACA-compliant coverage instead.

At ACA Signups, Charles Gaba estimates that there are roughly a million people enrolled in grandfathered plans, and fewer than one million people still enrolled in grandmothered plans as of the spring of 2016.

If and when your plan ends, you’ll be able to pick a new plan, either on or off-exchange. If your plan ends up with a termination date outside of open enrollment (say, at the plan’s non-calendar-year renewal date, for example), you’ll have a special enrollment period during which you can pick a new plan. Although you don’t currently qualify for a subsidy, you might want to enroll through the exchange anyway, just in case your income drops later in the year (you would then have the option to claim the subsidy on your tax return if you were enrolled through the exchange and ended up being eligible for a subsidy due to a drop in income).

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