Grandfathered Plans and the Affordable Care Act

We won a host of new protections and privileges under the Affordable Care Act, like for example free preventive care and the ever-popular banning lifetime limits. But, a year later many of us still have questions about these - when do I these? What if my employer renews their plan?

Figuring out grandfathered status and what applies to grandfathered employer plans, individual plans or both or neither can make anyone's head swirl. That's why PHAN invited Claire McAndrew of Families USA to join our Tuesday Night Policy Call Series and break it down for us. Here's a recap, but for the full notes or to listen to the call online click here.

First off, what is a grandfathered plan??  Any plan that already existed when the Affordable Care Act was signed.  That means that your employer could have a plan that existed before March 23, 2010 that you only recently were added on to, but it's still grandfathered.

Now there are some ways plans can lose their grandfathered status.  Unfortunately, raising rates is not one of them.  But, increasing copayments by more than $5 (after adjusting for medical inflation) will cause a plan to lose their coveted grandfathered status.  ~So will adding on new annual limits that weren't there before 3/23/10 or increasing the deductible or out of pocket caps too much. 

Here's where it gets tricky:  Each of our favorite provisions has it's own rules about grandfathered status and how it does or doesn't apply.

So let's take a few:

Staying on your parent's plan until your 26
This applies to all grandfathered plans, individual plans and group plan, or employer-based coverage.  The only exception is that if the young adult is offered coverage from their employer then they cannot get added onto their parent's employer-based plan.  They can get added onto their parent's plan if the parent has an individual plan.

See what I mean?  Tricky.

Ok Let's look at free preventive care.
This does not apply to grandfathered plans, neither individual nor employer.  The only way to get this awesome benefit is to buy a new plan or sign up for an employer-based plan that was purchased after 3/23/10.

Prohibiting the denial of coverage to kids under 19 or putting exclusions on the policy because of pre-existing conditions
This protection does apply to grandfathered plans in the employer market (although you may have to wait until open enrollment period to add them back on).  In the individual market it does not apply to grandfathered plans.  So, for example, say your kid has asthma and your plan says there is an exclusion on coverage and it won't cover anything having to do with the asthma for 12 months..you still have to wait out that 12 months.

Banning annual limits
So this year annual limits on plans (with a few exceptions) can't be less than $750,000.  This applies to grandfathered employer plans.  This does not apply to grandfathered individual plans.

Banning lifetime limits
This applies to every plan, grandfathered group and individual.

Protections against rescission of coverage
Again, these protections are available to everyone on group or individual plan and it doesn't matter when you purchased the plan.

Women having direct access to OBGYN dr.s (not need a referral from a primary care doctor)
This does not apply to any grandfathered plan

Again, for the full list of your favorite provisions or to listen to the call completely visit our Policy Call Series page by clicking here.

The jist of it is if you purchased your plan after 3/23/2011 you're going to have a host of consumer protections and extra benefits in your insurance plan.  If however, you purchased it before the Affordable Care Act was signed into law, then you may have to wait for some of them.  The most important consumer protections are available to everyone.  For some things like free preventive care, we need to wait until your plan loses it's grandfathered status, your employer purchases a new plan, or you purchase a new plan on the individual market.

Have a story about how one of these provisions made a difference in your life?  Let us know.  Email us at aford@pahealthaccess.org or post it on our Facebook page.