QUESTION: Our group health plan was grandfathered, but it lost that status in 2017. Is there anything we can do to have it grandfathered again?
ANSWER: No, once a health plan has lost its grandfathered status it cannot be regained. Grandfathered plans are group health plans (or health insurance coverage) that have continuously provided coverage since March 23, 2010, and have not undergone certain prohibited design changes since then. These plans are excused from some requirements under the Affordable Care Act (ACA), such as coverage of preventive health services without cost-sharing and provisions for an expanded appeals process and external claim review, but are subject to other provisions. Grandfathered status can be maintained indefinitely so long as the plan or coverage continues to cover at least one person; no prohibited plan design changes are made; and the required disclosure and recordkeeping requirements are met. However, grandfathered status cannot be reclaimed after it is lost.
The number of grandfathered plans has consistently decreased since the ACA was enacted. The agencies have reported that in 2018, approximately 20% of employers that offered health benefits offered at least one grandfathered group health plan—down from 72% in 2011. And 16% of workers with employer-sponsored coverage were enrolled in a grandfathered group health plan in 2018—down from 56% in 2011 (see our Checkpoint article). While acknowledging that some employers, insurers, and participants continue to find value in grandfathered plans, the agencies have reiterated that there is no authority for a health plan that is currently not grandfathered to obtain or regain grandfathered status.
For more information, see EBIA’s Health Care Reform manual at Section VI (“Grandfathered Health Plans”).
Contributing Editors: EBIA Staff.