While President Obama declared on several occasions that people who liked their health insurance plans would be able to keep them, some people have nonetheless found their policies cancelled by their insurance companies in response to the changes under the Affordable Care Act (ACA). Amidst all the confusion about healthcare reform, you may have heard the phrase “grandfathered plans,” but what does it mean?
What Is a “Grandfathered” Plan?
A grandfathered health plan is one that existed before March 23, 2010, when the Affordable Care Act went into effect, and is therefore not required to meet all of the requirements of the ACA. Despite being generally happy with their pre-ACA plans, some people with grandfathered plans may find themselves missing out on key coverage improvements required under the new law.
For example, grandfathered plans are not required to offer the 10 essential health benefits outlined in the ACA, nor are they required to offer preventive services with no cost sharing. Grandfathered individual plans (not purchased through work) are still allowed to impose dollar limits, such as capping coverage on specific benefits during a calendar year. Insurers can also refuse to cover children under age 19 with preexisting conditions, on grandfathered plans.
Yet, while grandfathered plans are exempt from meeting some of the requirements of the ACA, there are limitations to those exemptions. Grandfathered plans cannot impose lifetime limits on coverage, for example, and they must allow dependents to be covered on their parents’ plan until age 26.
How Do I Know If My Plan Is Grandfathered?
It may be impossible to determine whether your plan is grandfathered simply by looking at it. It’s best to contact your insurance company or agent directly, to find out whether your plan is grandfathered.
If you are currently insured through your employer, it is possible that you are covered by a grandfathered plan. A survey by the Kaiser Family Foundation found that in 2013, 36% of people who had coverage through work were enrolled in a grandfathered plan. It’s also important to note that even if you accept a new job and enroll in your employer’s health plan, one or more of the plans your employer offers may have grandfathered status.
While many plans today are grandfathered, more plans are expected to lose this status over time, which will expose more Americans to the additional benefits of the ACA.
Benefit Packages is a health insurance exchange-certified agency based in Southern California that has been helping individuals and businesses find affordable California health insurance for over two decades. Call us today for a comprehensive consultation and quote at 1-800-356-3615.