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Supplemental
Value Added Services
Wellness and Care
Figure 3:
HIPAA-excepted products will be available for all segments
and will not be subject to ACA market reforms.
An employer-sponsored health plan can be grandfathered if it: (1) covered employees when
the ACA was enacted (March 23, 2010), (2) if the plan does not make certain changes that
lower benefits or employer contributions, (3) if the plan does not increase employee paid
coinsurance or copayment costs, and (4) if notice of the plan’s grandfathered status is provided
to employees. Many employers make changes to their benefits design and contribution levels
annually to keep the cost under control. While grandfathered plans may have lower premiums
than some of the non-grandfathered plans, other factors such as medical trends, benefits design
(e.g. variations in deductibles) may have an impact on renewal rates. The number of employers
with grandfathered plans and employees in grandfathered plans has steadily decreased each
year because of these changes.
Grandfathered plans:
• Cannot significantly cut or reduce benefits
• Cannot raise employee co-insurance charges
• Cannot significantly raise co-payment charges (15 percent more than medical
trend since 2010)
• Cannot significantly raise deductibles (15 percent more than medical trend since 2010)
• Cannot significantly lower employer contributions (more than 5 percent of proportional cost
share for any coverage category)
• Cannot add or tighten an annual limit on what the plan pays
• May change insurance companies, provided no change in coverage as described above
Grandfathered plans are exempt from a number of health care
reform provisions, such as:
• Certain benefit mandates, such as essential health benefits or requirements to cover
certain preventive benefits at no cost sharing
• Clinical trial coverage
• External appeals process
• Non-discrimination testing for fully insured plans
• Maximum out-of-pocket and deductible limits
• Some of the additional reporting and disclosures
• Guaranteed availability and renewability
Grandfathering
