What is a Grandfathered Group Health Plan?
Setnor Byer Insurance & Risk
Health Insurance, Group Health Insurance, Health Coverage
Though the term ‘grandfathered’ is commonly used when discussing group health insurance under the Affordable Care Act (ACA), many people don’t know what it means. ‘Grandfathered’ is used to describe group health plans that are exempt from many of the ACA’s provisions. These exemptions were included in the ACA so groups that were happy with their health plans could keep them
To be eligible for grandfathered status, a group health plan must have been in existence on March 23, 2010, which is the day the ACA became law. Plans starting after this date do not qualify for grandfathered status. Additionally, plans that have made significant changes since March 23, 2010 may lose their grandfathered status. For example, increased cost-sharing requirements, such as copayments and deductibles, decreased employer contributions, elimination of benefits, and changes in annual limits may cause a plan to lose its grandfathered status.
Grandfathered group health plans are exempt from many of the ACA’s provisions. For example, the following provisions do NOT apply to grandfathered plans.
Fair health insurance premiums: Under the ACA, health insurers may not charge discriminatory premium rates.
Guaranteed availability of coverage: Under the ACA, insurers must generally accept every employer group in the State that applies for coverage, though they can limit enrollment to annual open and special enrollment periods.
Guaranteed renewability of coverage: The ACA generally requires guaranteed renewability of coverage regardless of health status, utilization of health services, or any other related factor.
Comprehensive health insurance coverage: The ACA generally requires that insurers include coverage for defined essential benefits, provide a specified actuarial value, and comply with limitations on allowable cost sharing.
Coverage of preventive health: Under the ACA, group health plans must cover certain preventive services, immunizations, and screenings, without any cost sharing.
Prohibition on discrimination in favor of highly-compensated individuals: The ACA prohibits fully-insured group health plans from discriminating in favor of highly compensated individuals with respect to eligibility and benefits.
Patient protections: The ACA generally requires group health plans to permit an individual to select a participating primary care provider, to provide direct access to obstetrical or gynecological care without a referral.
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Affordable Care Act
, Group Health
, Group Health Insurance
, Health Coverage
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