The state of grandmothered and grandfathered plans
- If your pre-ACA plan renews mid-year, you’ll have a special enrollment period.
- Hundreds of thousands still have grandmothered or grandfathered health plans.
- Grandfathered plans can remain in force indefinitely.
- States and health carriers decide whether you can keep a grandmothered plan.
- Latest extension allows grandmothered plans in many states to remain in force in 2020.
- The extension of grandmothered plans is controversial.
- Grandmothered plans must comply with more ACA regulations than grandfathered plans.
- Thirty-two states still allow renewals of grandmothered plans.
- Four states would allow renewals but no longer have any grandmothered plans in the individual market.
- Fourteen states and DC did not allow renewals of grandmothered 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 2020 health coverage runs from November 1, 2019, to December 15, 2019, although some states have extended their 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 2020 as well.
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 2020
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 (this was left to each state’s discretion, as has been the case with all of the subsequent extensions). Another extension was issued in February 2016, allowing grandmothered plans to remain in force throughout 2017. A third extension was issued in February 2017, allowing grandmothered plans to remain in force throughout 2018.
A fourth extension was issued in April 2018, and yet another extension was issued in March 2019, allowing — again, at each state’s discretion — grandmothered plans to renew until as late as October 1, 2020, as long as they terminate by the end of 2020 or are brought into compliance with the ACA by January 1, 2021. The details are the same as the previous extensions that have been issued, but with the deadlines pushed out another year.
The most recent extension will align the termination date of grandmothered plans with the open enrollment period for 2021 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 2020 (up until October 1, 2020). But they must terminate by the end of 2020 or come into compliance with the ACA as of the start of 2021, regardless of their renewal date.
The provision allowing grandmothered plans to renew up until October 1, 2020 (instead of October 1, 2019) will let people with grandmothered plans that renew between October 2 and December 31 keep their grandmothered coverage in 2020. Without the extension that HHS issued in March 2019, all of those plans would have had to terminate in late 2019, as their renewal date would have been after October 1, 2019. With the latest extension, many of those plans will instead be eligible for renewal in late 2019, and will be able to remain in force in 2020.
But by the end of 2020, 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 — assuming there’s not another extension.
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 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 (although HHS has implemented or proposed numerous changes since then that will also create instability in the ACA-compliant market, including the proposals to expand access to short-term plans and association health plans).
But this effect has faded somewhat over time. As of late 2019, it’s been at least six years since anyone with grandmothered coverage went through the medical underwriting process, and underwriting “wears off” over time. 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 six years ago (keeping in mind that they haven’t been able to add any new enrollees in that time).
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 in most states, 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 state and insurer allow it, your pre-2014 plan will still be able to renew throughout most of 2020 (although the plans will have to terminate at the end of 2020).
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 2020 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 2020 for a family of four earning as much as $103,000.
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).
32 states allow renewals of grandmother plans
The transitional relief program leaves the final decisions up to states and carriers. There are 32 states where grandmothered individual market plans are still in existence as of 2019.
In general, these states have also gone along with the provision allowing grandmothered plans to renew again for 2020, although carriers can opt to discontinue grandmothered plans even in states where renewal is allowed.
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 plans can renew for 2020 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 (plans can remain in force until December 2020. 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 2020). 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 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. 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.
- Arizona (plans can remain in force through December 2020). 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.
- Arkansas (plans can remain in force through December 2020; the bulletin that Arkansas Insurance Department issued in 2018 also 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 through December 2020). That guidance from the Florida Office of Insurance Regulation was published on March 25, 2019, the same day that CMS published the latest extension allowance for transitional plans. The Florida guidance references the extension that CMS issued in 2018, but notes that the state will work with insurers that wish to extend coverage under “any additional extensions by CMS, if applicable.”
- Georgia (plans can remain in force through December 2020; the state did not issue any official guidance on the more recent extensions, but instead communicated the information directly to the health insurance carriers; as of late 2019, there are rate filings in SERFF for transitional plans with renewal dates in 2020). The Georgia Office of the Commissioner of Insurance noted that several insurers that initially had transitional plans in 2014 have since terminated those plans. 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 2020). 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 allows for another extension for transitional small group plans. HMSA’s 2019 filing (SERFF filing number HMSA-131977825) notes 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 through December 2020. 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. Idaho has since continued to go along with the federal extensions, most recently the one that allows grandmothered plans to remain in force in 2020.
- Illinois (plans can remain in force through December 2020. Health plans cannot impose additional cost-sharing or premium increases in the final months of 2020; the renewal rates and out-of-pocket amounts that apply to the final renewal must be extended through the end of 2020 if the plan remains in force through the end of 2020)
- Indiana (plans can remain in force through December 2020).
- Iowa (plans can remain in force through December 2020) The Iowa Division of Insurance clarified that as of 2018, there were 38,000 Iowans with individual market transitional plans, and 59,000 with small group transitional plans.
- Kansas (plans can remain in force through December 2019). The Kansas Insurance Department has not released any bulletins regarding transitional plans, but 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.
- Kentucky (plans can remain in force through December 2020; some carriers had previously indicated that they would not allow grandmothered plans to extend beyond their 2014 renewal date). The Kentucky Department of Insurance has also 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 through December 2020)
- Michigan (plans can remain in force through December 2020)
- Mississippi (plans can remain in force through December 2020). The Mississippi Insurance Department noted that “over 100,000” people in Mississippi have coverage under individual and small group transitional plans. This was down from “over 200,000” people as of early 2017.
- Missouri (plans can remain in force through December 2019; the Missouri Department of Insurance has not issued further official guidance on transitional plans, but the rate filing instructions the state issued in April 2018 included references to transitional plans that renew on or after January 1, 2019, and later 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 2020). But Blue Cross Blue Shield of Nebraska will terminate all of its pre-ACA individual health insurance policies at the end of 2019.
- New Hampshire (plans can remain in force through December 2020, but only if they are renewed on or before January 1, 2020; no transitional plan renewals will be allowed after January 1, 2020 (New Hampshire law does not allow for partial year renewals). And New Hampshire has clarified that this is the last time they’ll allow grandmothered plans to extend (see page 21 of their 2019 guidance). State regulators have said that even if CMS allows for another extension after the end of 2020, New Hampshire will still require grandmothered plans to end no later than December 31, 2020.
- New Jersey (plans can remain in force through December 2020)
- North Carolina (plans can remain in force through December 2020; 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 2020; 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-132018740), they only have 140 people enrolled in transitional coverage as of 2019.
- Ohio (plans can remain in force through December 2020)
- Oklahoma (plans can remain in force through December 2020)
- Pennsylvania (plans can remain in force through December 2020. Pennsylvania did not issue an official bulletin regarding the extension of transitional plans, but communicated directly with the insurers in the state, letting them know that plans could be extended in accordance with the CMS guidelines). 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 through December 2020; 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 2020) Sanford’s 2018 filing (SANF-131588434) noted that they had 504 people still enrolled in grandmothered plans as of 2018.
- Texas (plans can remain in force through December 2020)
- Utah (plans can remain in force through December 2020. 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 March 2019 is applicable in Utah).
- Virginia (plans can remain in force through December 2020. 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) calls for a 29 percent rate increase.
- Wisconsin (plans can remain in force through December 2020)
- Wyoming (Plans can remain in force through December 2020; 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; Golden Rule’s rate filings for grandmothered plans—together with grandfathered plans—are available on SERFF for rates that take effect in the fall of 2019; according to SERFF filing AMMS-131979180, Golden Rule still has 503 people covered under grandmothered plans in Wyoming as of 2019).
- Maine – Grandmothered small-group plans can 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.
- 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.
14 states and DC did not permit 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.
- 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.
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.