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Should I keep my grandmothered health plan?

If you have one of these non-ACA-compliant policies, you may be able to renew it again for 2018 – if your state and your carrier allow it.

The state of grandmothered and grandfathered plans

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).

Open enrollment for ACA-compliant 2018 health coverage ran from November 1, 2017, to December 15, 2017, although there are extensions and special enrollment periods that apply in many states after that deadline. But if you’re still covered under a plan you had prior to 2014, and your insurer has let you renew it for 2018, you haven’t yet had to do anything during any of the ACA open enrollment periods.

Grandfathered, grandmothered plans still in force

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 join 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 (carriers can, and do, terminate grandfathered plans), as long as they don’t make any substantial changes to the coverage.

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.

Some plans can stay in force until December 2018

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.

Then, 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.

Yet 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. This replicated the extension that was issued in 2016, but with the deadlines pushed out by one year.

The most recent extension will align the termination date of grandmothered plans with the open enrollment period for 2019 coverage. In states that agreed to the extension (and for insurers that also agree to continue to renew these plans), grandmothered plans will be eligible for renewal throughout most of 2018 (up until October 1, 2018). But they must terminate by the end of 2018, regardless of their renewal date.

The provision allowing grandmothered plans to renew up until October 1, 2018 (instead of October 1, 2017) allowed people with grandmothered plans that renew between October 2 and December 31, to keep their grandmothered coverage in 2018. Without the extension that HHS issued in February 2017, all of those plans would have had to terminate in late 2017, as their renewal date would have been after October 1, 2017. With the latest extension, many of those plans were instead eligible for renewal in late 2017, and can remain in force in 2018.

But by the end of 2018, 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 runs counter to the regulations that HHS finalized in April 2017, aimed specifically at stabilizing the individual market.

Grandmothered plan is up for renewal? You can opt for an ACA-compliant plan instead

Open enrollment for ACA-compliant plans (on and off-exchange) runs from November 1 to December 15, with coverage effective January 1. 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 insurer allows it, your pre-2014 plan will still be able to renew in 2018 (as long as the renewal date is prior to October 2018 if you have a grandmothered plan, but anytime during the year if you have a grandfathered plan).

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 for 2018 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 in 2018 for a family of four earning as much as $98,400).

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).

What grandmothered plans must cover

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).

31 states allow renewals of grandmother plans

The transitional relief program leaves the final decisions up to states and carriers. There are 31 states where grandmothered individual market plans were still in existence as of 2017.

Virtually all of those states have gone along with the provision to allow grandmothered plans to remain in force until the end of 2018, although carriers can opt to discontinue grandmothered plans instead.

Even if your plan is allowed to renew again to cover you in 2018, 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 plans can renew for 2018 in the following states (most of the states have simply adopted the federal government’s regulations, but some have added additional restrictions). Each state’s name links to the applicable extension documentation, if available:

  • Alabama – But Blue Cross Blue Shield, which had 91% of the individual market in Alabama in 2013, decided not to renew non-compliant plans into 2014.
  • Alaska – Premera is the only carrier in Alaska’s individual market that still has grandmothered plans, but they previously said those plans would be terminated at the end of 2017 and replaced with ACA-compliant plans. But 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
  • Arkansas – The Arkansas Insurance Department confirmed by phone that the state is going along with the February 2017 extension issued by CMS.
  • Florida – 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 – 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 must be renewed by December 31, 2017; no renewals in 2018 are allowed under the state’s guidance.
  • Idaho – Pursuant to a 2016 regulation 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 will be on calendar-year renewal schedules, as their previous renewals would have been through December 31, 2017; they will simply be allowed to renew for one more full year after the end of 2017.
  • Illinois – Health plans cannot impose additional cost-sharing or premium increases in the final months of 2018. The renewal rates and out-of-pocket amounts that apply to the final renewal must be extended through the end of 2018 if the plan remains in force through the end of 2018.
  • Indiana
  • Iowa
  • Kansas – Plans can remain in force through December 2017; state regulators have not responded to requests for more information regarding the extension through 2018.
  • Kentucky – Some carriers had previously indicated that they would not allow grandmothered plans to extend beyond their 2014 renewal date.
  • Louisiana
  • Michigan
  • Mississippi — the Mississippi Insurance Department was enthusiastic and immediate in their support for the latest extension.
  • Missouri – 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
  • 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
  • North Carolina — 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 – 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
  • Oklahoma
  • Pennsylvania – 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 CarolinaEleven 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
  • Texas
  • Utah – 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).
  • VirginiaLegislation 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
  • Wyoming – Wyoming did not issue a written statement, but the Wyoming Insurance Department confirmed that grandmothered plans can continue to renew.

States that would allow renewals but no longer have 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, 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.
  • Tennessee – The 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 its 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 Tennessee as of 2017.
  • West Virginia – The WV Office of the Insurance Commissioner confirmed that West Virginia is allowing small-group transitional plans to remain in force until as late as December 31, 2018, but only if they are renewed by January 2018. There are no longer any grandmothered individual market plans in West Virginia; they have already been terminated and replaced with ACA-compliant plans instead.

15 states are not permitting renewals

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.
  • Delaware
  • District of Columbia
  • Maryland
  • Massachusetts
  • 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.
  • 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.
  • Nevada
  • New Mexico – Plans can not be renewed after the end of 2014, but may continue to exist until their 2015 renewal date. At that point, they must be replaced with ACA-compliant plans.
  • New York
  • Oregon – Grandmothered plans could only remain in force through December 31, 2015.
  • Rhode Island
  • Washington
  • Vermont – The state allowed 2013 plans to be extended only briefly, until March 31, 2014.