grandmothered health plan
What is a grandmothered health plan?
What is a grandmothered health plan?
If your current individual/family or small-group 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 also referred to as “non-enforcement policies” as most ACA rules are not enforced for them). 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.)
Open enrollment for ACA-compliant 2023 health coverage will run from November 1, 2022 through January 15, 2023 in most states. (Some states have longer open enrollment periods.) But if you’re still covered under a plan you had prior to 2014, and your insurer has let you continue to renew it, you haven’t yet had to do anything during any of the ACA open enrollment periods. And you may be able to keep your plan in 2023 as well.
Can I buy a grandmothered health plan?
There are still hundreds of thousands of people who have coverage under a grandfathered or grandmothered individual health plan, although these plans cannot be sold to new enrollees. (In the individual market, nobody can enroll in a grandmothered or grandfathered plan unless they become a dependent of a person who already has coverage under one of these plans. For employer-sponsored plans, new employees can be added to existing grandmothered or grandfathered plans.)
Grandfathered plans, which were already in force as of March 23, 2010, can continue to remain in force indefinitely, at the discretion of the health insurance carrier as long as they don’t make any substantial changes to the coverage. (Carriers can, and do, terminate grandfathered plans.) The option for these plans to remain in effect indefinitely was specifically allowed in the ACA.
Grandmothered plans are different. When the ACA was written, there was no provision for grandmothered plans. These are the plans that were purchased after the ACA was signed into law, but before October 1, 2013, when the exchanges opened for business. The original timeline was that they would all terminate either at the end of 2013, or at their renewal date in 2014. They would then be replaced by ACA-compliant coverage, and the only non-compliant plans remaining would be grandfathered plans.
But amid the uproar over canceled plans in the fall of 2013, the Obama Administration announced a transitional relief program to allow non-grandfathered policies to renew at the end of 2013 (regardless of when their original renewal date would have been) and remain in force until their new renewal date in late 2014.
The final decision was left up to the states and to the health insurance carriers. Some states and carriers rejected the idea of creating a grandmothered plan provision, and required non-grandfathered health plans to terminate as planned. But many states and carriers accepted the new guidelines.
How long can grandmothered plans stay in force?
HHS subsequently issued additional extensions each year, giving grandmothered plans a one-year reprieve each time. The most recent extension was issued in March 2022, allowing – again, at each state’s – grandmothered plans to renew “remain in effect until CMS announces that coverage renewed under this non-enforcement policy must come into compliance with the relevant requirements.” In other words, CMS has issued an open-ended extension, instead of the one-year-at-at-time approach that they had been using since late 2013.
As has always been the case, additional oversight of grandmothered plans is up to each state. Although the federal government is allowing these plans to continue to renew for the time being, a state can choose to require grandmothered plans to terminate and be replaced with ACA-compliant coverage. And even if a state allows grandmothered plans to continue to renew, a health insurer can decide to terminate these plans and replace them with ACA-compliant coverage. This becomes more likely over time, as the number of people enrolled in these plans dwindles (since new enrollees can no longer enroll in these plans), enrollees get older, and the administrative costs can no longer be justified.
Extension of grandmothered plans is 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 unsubsidized 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 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 runs counter to the regulations that HHS finalized in April 2017, aimed specifically at stabilizing the individual market.
But this effect has faded somewhat over time. As of 2022, it’s been nearly a decade since anyone with grandmothered coverage went through the medical underwriting process, and underwriting “wears off” over time (coverage can only be underwritten at the time of application; insurers cannot medically underwrite a person’s plan at each annual renewal). Some insurers with grandmothered plans have been raising premiums by increasingly large margins in recent years, reflecting the fact that their enrollees might now be in overall poorer health than they were several years ago (keeping in mind that they haven’t been able to add any new enrollees in that time).
Can I switch from a grandmothered plan to an ACA-compliant plan?
All ACA-compliant plans in the individual market are calendar-year plans, which means they renew each year on January 1, even for people who sign up mid-year using a special enrollment period.
Calendar-year plans weren’t the norm prior to 2014, so if you still have a grandmothered plan (or a grandfathered plan), your plan’s renewal date could be anytime during the year. If your state and insurer allow it, your pre-2014 plan will continue to be able to renew until if and when the federal government decides to end this extended non-enforcement period — and they may never choose to do that, relying instead on insurers to eventually terminate these plans when enrollment becomes unsustainably low.
But don’t renew your pre-2014 plan until you compare all of the available options for ACA-compliant coverage. You might be surprised at how big the premium subsidies are in some areas. And don’t assume you don’t qualify for premium subsidies until you talk with a tax adviser, as there are ways to reduce your modified adjusted gross income if it’s a little too high for subsidy eligibility; subsidies are available for 2022 coverage even if your income is above 400% of the poverty level, thanks to the American Rescue Plan. This enhanced subsidy eligibility may or may not continue into 2023 and beyond, as it will depend on whether Congress extends the ARP provisions.
And if your health plan doesn’t follow the calendar year (ie, you have a renewal date other than January 1, which is common for grandmothered plans), you’ll qualify for a special enrollment period for ACA coverage when your current plan is up for renewal. That gives you the option to either renew your grandmothered (or grandfathered) plan, or to pick a new ACA-compliant plan, with premium subsidies if you’re eligible (and cost-sharing reductions if you’re eligible for those).
Do grandmothered plans comply with ACA regulations?
Grandmothered plans must 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 do not have to cover EHBs other than preventive care, but if they do provide coverage, they cannot place an annual dollar limit on it.
But grandmothered plans are exempt from some of the main consumer protections and mandates in the ACA. And since all of their members were healthy enough to obtain medically-underwritten coverage between 2010 and 2013, the overall risk pool is still fairly healthy, making the premiums generally lower than unsubsidized premiums for ACA-compliant plans (premium subsidies are not available to offset the cost of grandmothered plans).
Which states allow renewals of grandmothered health plans?
The transitional relief program leaves the final decisions up to states and carriers. There are at most 31 states where grandmothered individual market plans are still in existence as of 2022. These are the states that have continued to go along with the federal provision allowing grandmothered plans to continue to renew, although carriers can opt to discontinue grandmothered plans even in states where renewal is allowed (Alaska is an example of this, for 2022 coverage).
Even if your plan is allowed to renew again, make sure you take a few minutes to shop around in your state’s exchange before your plan renews, to see if there might be a better option available to you. Brokers and navigators in your community can provide assistance – free of charge – if you need it.
Grandmothered individual/family plans can continue to be renewed in the following states. Most of these states have simply adopted the federal government’s regulations, but some have added additional restrictions. Each state’s name links to the latest applicable extension documentation, if available (we will continue to update these page throughout 2022, as states issue guidance related to the open-ended extension that the federal government published in March 2022. If a state announces that insurers can go along with the federal guidance, we’ll note that grandmothered plans can remain in force until further notice in that state).
- Alabama — Plans can remain in force until further notice. However, Blue Cross Blue Shield, which had 91% of the individual market in Alabama in 2013, decided not to renew non-compliant plans into 2014.
- Arizona — Plans can remain in force until further notice. According to the Arizona Department of Insurance, approximately 70,000 people in the state still had transitional plan coverage in the individual and small-group markets as of 2018. By 2019, that had dropped to 53,000 people, with plans issued by at least six insurers in the individual and small group markets. By 2020, there were only about 44,000 Arizona residents with transitional health insurance.
- Arkansas — Plans can remain in force until further notice. The bulletin that Arkansas Insurance Department issued in 2018 notes that if the federal government issues any additional extension for grandmothered plans (in 2019 or beyond), Arkansas will automatically allow plans to follow the federal guidelines, but the state won’t be issuing any more year-to-year bulletins on the matter).
- Florida — Plans can remain in force until further notice. The Florida guidance notes that the state will work with insurers that wish to extend coverage under “any additional extensions by CMS, if applicable.” As of 2020, there were fewer than 104,000 people with grandmothered individual market coverage in Florida.
- Georgia — Plans can remain in force until further notice. The state did not issue any official public guidance on the more recent extensions, but instead communicated the information directly to the health insurance carriers. The Georgia Office of the Commissioner of Insurance noted that several insurers that initially had transitional plans in 2014 have since terminated those plans, and that the overall transitional market in the state has dwindled considerably (as expected, given that no new enrollees have joined these plans for nearly a decade). Based on filings that were submitted to state regulators in 2017 and 2018, there were only about 3,000 people who still had grandmothered individual coverage in Georgia at that point (via Freedom Life – which was down to only 24 enrollees as of 2019, Golden Rule, Kaiser, and National Foundation Life). But grandmothered small group enrollment remained much higher, at about 26,000 people (mostly with Blue Cross Blue Shield coverage, but some have Kaiser plans). In 2019, Golden Rule’s proposed rates (effective July 2019) were approved, and the rate filing indicated that 2,814 people were covered under Golden Rule’s transitional individual market plans at that point.
- Hawaii — Small-group plans can remain in force through December 2022). Hawaii had previously allowed transitional plans to remain in force in both the individual and small group markets (see the memo published in 2018, referring to extensions through the end of 2019). But the memo the state published in 2019 only allowed for another extension for transitional small group plans, and that was continued for 2021 as well. The 2021 memo, pertaining to the extension through 2022, is less specific: It simply says that Hawaii’s insurance commissioner will not take action to prohibit the continued participation in grandmothered plans. But since individual grandmothered plans had to end prior to 2020, the only remaining grandmothered plans are in the small group market. HMSA’s 2019 filing (SERFF filing number HMSA-131977825) noted that HMSA terminated all of their transitional individual market plans at the end of 2018, and that about two-thirds of those members switched to ACA-compliant HMSA plans for 2019.
- Idaho — Plans can remain in force until further notice; Idaho’s 2020 bulletin clarified that the state would allow grandmothered plans to be extended in future years if CMS allows it, and that the plans will only have to terminate if required to do so by the federal government. Pursuant to a 2016 bulletin from the Idaho Department of Insurance, all grandmothered plan renewals on or after August 1, 2016 had policy periods that extended 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 work on renewed grandmothered plans. In going along with the subsequent extension, allowing plans to remain in force through the end of 2018, Idaho regulators noted that all grandmothered plans that remained 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 until further notice.
- Indiana — Plans can remain in force until further notice.
- Iowa — Plans can remain in force until further notice. The Iowa Division of Insurance clarified that as of 2021, there were 65,000 Iowans with transitional plans, including individual and small group coverage (that was down from 97,000 in 2018).
- Kansas — Plans can remain in force through December 2022. The Kansas Insurance Department has confirmed that the state is allowing transitional plans to renew according to the federal guidance. A rate filing for Golden Rule indicated that the insurer had 873 members on transitional plans in Kansas as of early 2019. This had dropped to 419 members as of 2020, according to SERFF filing AMMS-132288466.
- Kentucky — Plans can remain in force until further notice. but some carriers did not allow grandmothered plans to extend beyond their 2014 renewal date. The Kentucky Department of Insurance has also permitted “limited changes to transitional plans to provide premium relief,” although the changes had to be approved by the Department of Insurance before they could be implemented.
- Louisiana — Plans can remain in force until further notice. The Louisiana Department of Insurance confirmed that no additional bulletins have been issued, but that there are still “a few” transitional plans in force and the state is leaving it up to the insurers to determine whether to renew them.
- Michigan — Plans can remain in force through December 2023. Instead of going along with the indefinite extension that CMS issued, Michigan has said that these plans can remain in force throughout 2023, and that the Michigan Department of Insurance and Financial Services will re-evaluate that decision annually.
- Mississippi — It’s unclear whether Mississippi is still allowing transitional plans to renew, as guidance has not been issued by the state since 2019. The Mississippi Insurance Department noted that “over 100,000” people in Mississippi had coverage under individual and small group transitional plans as of 2019. This was down from “over 200,000” people as of early 2017.
- Missouri — Plans can remain in force until further notice; the Missouri Department of Insurance has not issued further official guidance on transitional plans, but the 2023 plan year rate filing instructions the state issued in March 2022 included references to transitional plan renewals. In 2018, Missouri regulators had posted a summary of the 2019 rate filings, which includes rates for transitional plans maintained by two insurers – Health Alliance Life and Cox Health Systems.
- Nebraska — Plans can remain in force through December 2022. But Blue Cross Blue Shield of Nebraska terminated all of its pre-ACA individual health insurance policies at the end of 2019 (those members were given a guaranteed-issue option to transition to the insurer’s new Armor Health plan).
- New Hampshire — Plans can remain in force until further notice. In 2019, New Hampshire had said they would allow grandmothered plans to renew one more time (for 2020), but not again, even if CMS issued another extension (see page 21 of their 2019 guidance). However, their 2020 guidance (see page 21) makes no reference to the 2019 notice, nor does the 2021 guidance (see page 7), which simply indicates that the plans can renew again for 2022, just as they have in prior years. And the guidance that New Hampshire issued for 2023 indicates that they are going along with the open-ended extension that the federal government is allowing.
- North Carolina — Plans can remain in force until further notice; 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 2022; no additional bulletins were issued, but the ND Insurance Department confirmed that the state will follow the latest guidance from CMS. However, Sanford is the only insurer that still has transitional plans in North Dakota. 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). According to Sanford’s rate filing for 2020 renewals (SERFF tracking number SANF-132869788), they only have 96 people enrolled in transitional coverage as of 2021.
- Ohio — Plans can remain in force until further notice.
- Oklahoma — Plans can remain in force until further notice.
- Pennsylvania — it appears that Pennsylvania is allowing transitional plans to continue to renew, as they are mentioned in the 2023 rate filing guidance. Pennsylvania has not issued an official bulletin regarding the extension of transitional plans, but a filing submitted by Highmark in July 2020 indicated that transitional plans were allowed to continue through 2021 in the state. As of 2018, Geisinger’s transitional plan filing data indicated that they had 1,791 individual market enrollees with grandmothered coverage in Pennsylvania.
- South Carolina — Plans can remain in force until further notice. 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 until further notice. Sanford’s 2018 filing (SERFF filing SANF-131588434) noted that they had 504 people still enrolled in grandmothered plans as of 2018.
- Texas — Plans can remain in force until further notice. Texas “does not object to carriers renewing noncompliant plans under the federal transitional policy,” indicating that insurers may continue to do so as long as federal rules allow for it.
- Utah — Plans can remain in force until further notice. 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 2022 is applicable in Utah.
- Virginia — It is not clear whether there are still grandmothered plans in effect in Virginia. 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, as did Freedom Life, although the Bureau of Insurance noted that those are the only individual market carriers that still have grandmothered plans in the state, and enrollment in those plans is small. There are no grandmothered small group plans in Virginia. Golden Rule’s transitional rate filing for 2020 (SERFF filing number AMMS-132048397) called for a 29% rate increase.
- Wisconsin — Plans can remain in force until further notice.
- Wyoming — Plans can remain in force until further notice; The Wyoming Insurance Department noted that there were roughly 10,400 people in Wyoming who still had grandmothered coverage as of 2018; about 6,500 had individual market coverage, and the rest were in the small group market; According to SERFF filing AMMS-131979180, Golden Rule still had 503 people covered under grandmothered plans in Wyoming as of 2019.
States that would allow renewals but no longer have any grandmothered plans in the individual market:
- Alaska — Premera is the only carrier in Alaska’s individual market that still has grandmothered plans, and they have announced that all of their grandmothered and grandfathered individual/family plans will terminate at the end of 2021. Premera had initially 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. And they have continued to do so ever since, although it appears that the termination will happen at the end of 2021. The Alaska Division of Insurance noted that there were fewer than 2,000 people who still had grandmothered individual market plans in Alaska as of late 2017, and that had dropped to 844 by 2019.
- Maine – Grandmothered small-group plans could remain in place through December 2019. There are no longer any grandmothered individual market plans in Maine; Anthem was the only individual market carrier in Maine carrier with grandmothered plans, 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 of Montana’s individual market carriers decided to switch to ACA-compliant plans instead of maintaining grandmothered plans.
- New Jersey — New Jersey’s insurers have only continued small group plans, so there are no individual grandmothered plans in New Jersey. But the state is allowing the small group plans to remain in force through December 2022.
- Tennessee – The Tennessee Department of Commerce and Insurance confirmed that plans could 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 its grandfathered individual market plans at the end of 2015. The Tennessee Department of Commerce and Insurance confirmed that there were no longer any grandmothered individual market plans in Tennessee as of 2017.
- West Virginia – The WV Office of the Insurance Commissioner confirmed that West Virginia was 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. There are no longer any grandmothered individual market plans in West Virginia; they were previously terminated and replaced with ACA-compliant plans instead.
Which states did not permit renewal 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 – The state’s insurance commissioner has 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 ACA-compliant plans. However, it appears that some insurers in New Mexico disregarded this rule and continued to renew non-ACA-compliant plans in the state. In April 2019, New Mexico issued an additional bulletin referencing these policies and noting that they had to terminate by the end of 2019.
- 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.
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