Grandfathered Health Care Plans

Grandfathered Versus Non-Grandfathered


Certain terms are being constantly thrown around, including “grandfathered” and “non-grandfathered” when discussing health care plans. What does each mean? What are the main differences between the two?

A “grandfathered” health care plan is one that has not had to change to fit all the requirements set by the Patient Protection and Affordable Care Act (PPACA), having existed in its current form since before March 23, 2010. Grandfathered plans must always have at least one person being covered at all times past March 23, 2010, although the person need not be the same constantly. On the other hand, “non-grandfathered” health care plans are those that have been created, bought, or changed since March 23, 2010. Non-grandfathered health care plans are subject to all of the new provisions of the PPACA.

Although grandfathered plans are guaranteed to be almost the same as they were before the PPACA was pushed through Congress, they must follow a few aspects of the PPACA. These requirements may vary slightly based on whether or not the grandfathered plan is for an individual or a group.

The following are parts of the PPACA that must be followed by grandfathered health care plans:

• There must be a lack of prohibition of coverage based on health discrimination starting for dependents under19 on September 23, 2010, and for everyone on January 1, 2014. (This is applicable to only grandfathered group health care plans.)

• There is a prohibition on excessive waiting periods.

• There can be no lifetime limits, and there may only be applicable annual limits on grandfathered individual plans.

• Rescissions are prohibited, except in the case of premeditated fraud, starting September 23, 2010.

• Those under the age of 26 must be available for coverage by their parents’ grandfathered plans unless their current employer offers health insurance coverage.

• Grandfathered health care plans must cover preventive care services without extra cost to the consumer.

Find out what can make a previously-grandfathered health care plan change into a non-grandfathered plan.

Check back soon to learn about coming changes to the Medicare program.