grandfathered health plan

What is a grandfathered health plan?

Grandfathered plans are health plans that were already in effect as of March 23, 2010, when the Affordable Care Act was signed into law. In the individual market, they are plans that already covered the policyholder as of that date, and in the employer-sponsored market, they are plans that the employer had already implemented as of that date, and has continuously offered ever since, with at least one covered employee at all times.
Employees can join an employer’s existing grandfathered plan, but grandfathered plans have not been available for purchase (in the individual market, or by an employer) since the ACA was signed into law.
The ACA specifically provides for the indefinite continuation of grandfathered plans, which is what President Obama was talking about when he said people would be able to keep their pre-ACA plans if they wanted to.
In order to retain grandfathered status, the plans cannot have been substantially changed since the ACA was enacted, including limits on how much cost-sharing can increase and how benefits can change. In February 2019, the Departments of the Treasury, Labor, and Health & Human Services published a request for comments on whether there should be rule changes to make it easier for employer-sponsored grandfathered plans to retain their grandfathered status going forward, so it’s possible that the Trump Administration may issue additional guidance related to how employer-sponsored grandfathered plans can retain their status (the request for comments did not pertain to individual market grandfathered health plans, so nothing is expected to change for those plans).
Grandfathered plans don’t have to comply with the majority of the ACA’s provisions, but they cannot have lifetime benefit limits on any essential health benefits that they cover (they aren’t required to cover essential health benefits though), must allow insureds to keep their children on the plan until age 26, and must abide by the ACA’s medical loss ratio rules.
Grandfathered plans are allowed to remain in force indefinitely — neither the state nor the federal government can force them to end. But insurers can make the decision to terminate grandfathered plans, and some have done so, including Humana, Blue Shield of California, and Blue Cross Blue Shield of North Carolina. As time goes by and the pool of people on grandfathered plans shrinks and ages (since nobody new can join grandfathered plans), insurers will be less likely to keep those plans in force.
Note that grandfathered plans are not the same as grandmothered plans.

Find affordable health plans

Since 2008, we’ve helped more than 16 million people.

(Step 1 of 2)