Grandfathered Plans

  • What is a grandfathered plan? 

    Under the Affordable Care Act (ACA) health plans established by March 23, 2010 may be considered to be grandfathered plans. These plans are not subject to some of the provisions of the ACA.

    Should my group continue on a grandfathered plan? 

    In determining whether to stay on a plan with grandfathered status, your group will need to carefully weigh price, benefits and flexibility. New plans bring greater benefits, choice, and flexibility, but may come at a greater cost. Grandfathered plans maintain most of their existing benefits, but plan design choices are limited.

    What are the mandatory changes under the ACA? 

    Regardless of a health plan’s grandfathered status, these new ACA benefit rules apply to all 2014 renewals and beyond:

    • Elimination of lifetime and annual benefits
    • Elimination of all pre-existing condition limitations
    • Probationary period cannot exceed 90 days

    What can cause a group to lose grandfathered status? 

    • Eliminating or significantly reducing a benefit or element that is necessary to treat or diagnose a particular condition (e.g. eliminating all benefits to treat diabetes)
    • Increasing employee cost-sharing percentages (such as deductible, copays, coinsurance and out of pocket maximum)
    • Increasing co-pays by more than $5 or a percentage equal to medical inflation plus 15%
    • Reducing employer contributions by more than 5% compared to their contribution on 3/23/2010
    • Adding or reducing an annual limit
    • Eliminate or substantially eliminate benefits for a particular condition

    What can my group do to maintain its grandfathered status? 

    • Maintain records of plan design and contributions levels as of 3/23/2010 and any subsequent changes
    • Include a notice about the plan’s grandfathered status in enrollment materials and summary plan descriptions

    What will the non-grandfathered plans look like for Small Group?  

    • Metallic levels. Federal healthcare reform categorizes plan levels into bronze, silver, gold and platinum. Platinum plans have the highest level of benefits and highest cost to you.
    • More benefits and cost. New plans will likely have more benefits than the current plan you offer employees. If this is the case, you may see an increase in cost.
    • More wellness and discount opportunities. If your employees commit to certain activities related to wellness, we can offer rate discounts. We’ll be providing more information on wellness program options closer to your renewal time.