If you have spent time reading about health insurance and the Affordable Care Act, you may have noticed that there is mention of health insurance policies which are considered grandfathered under the new law. On this page, we are going to help you understand what the term ‘grandfathered’ means and how it applies, and to which policies it applies. We hope by the end of the page, you will have a better understanding of ‘grandfathered’ and what options are available to you.
What a ‘grandfathered’ policy is
Quite simply, any health insurance plan – whether purchased through an employer or as an individual – which was purchased prior to March 23rd, 2010 are given the status of ‘Grandfathered’.
What ‘grandfathered‘ means
Any plan which is grandfathered means that it was in existence prior to the March 23rd, 2010 and therefore prior to the Affordable Care Act. This means that the plan, and the insurer, does not have to include the provisions of the Affordable Care Act. Any policy issued after that date will be required by law to adhere to the laws and provisions within the Affordable Care Act.
Insurance companies with grandfathered plans will be able to make minor changes to their policies without losing the status of a grandfathered plan.
What this means to you
If you are enrolled in a grandfathered health plan, all you need do is consistently renew your plan each year. Consumers can still enroll in a grandfathered plan as the grandfather status applies to when the health care plan began and not your enrollment date. However, you may find that it is in your best interest to look at the different plans available within the Health Care Marketplace to ensure that you are receiving the best possible health care plan at the best price.
What happens to grandfathered plans under the ACA?
As per the general guidelines for grandfathered plans, there are certain things that are covered by the health care plan and certain other things, which are not. Here’s a quick review of the things that are changed due to the ACA regulations:
- Covers health expenses throughout the lifetime limits
- Ensure not to arbitrarily cancel the health plan
- Provide health care coverage for people up to age of 26 years
- Provide an easy to understand benefits and coverage instructions to give the enrollees information about the coverage of health plan and cost estimation
- Ensure that the insurance companies are spending the premium money of enrollees on health care plans and not on other administrative expenses.
Some cons of a grandfathered health plan:
- It is not mandatory that they offer preventive health care free of cost
- Does not have any guarantee to protect your right to appeal against policies
- Does not have the guarantee to provide you the doctor of choice or other medical facilities
- In case of the increment in premiums, the health plans are not accountable for any Rate Review.
What are your options if you have such a plan?
In order to find out whether your health-care insurance is grandfathered or not, you can check it using one of the following:
- Check the insurance policy documentation. It is mandatory for the documentations of any health plan to disclose if the plan is grandfathered. This information is to be provided in all plan describing materials.
- Check with your insurance agent or employer: if you are receiving health insurance benefits through your employer then you can confirm such details by asking the benefits manager at your employer’s offices. Otherwise you can always contact the benefits administrator at the insurance company itself.