The Centers for Medicare & Medicaid Services (CMS) has once again allowed insurers and states to renew so-called transitional health plans that pre-dated Affordable Care Act coverage requirements and that don't have to comply with those rules. This is the fifth such extension.
The most recent extension issued on March 25, 2019, will align the termination date of grandmothered plans with the open enrollment period for 2021 coverage. In states that agreed to the extension (and for insurers that also agree to continue to renew these plans), grandmothered plans will be eligible for renewal throughout most of 2020 (up until October 1, 2020). But they must terminate by the end of 2020, regardless of their renewal date. FOR NOW!
“Not extending the grandmothered plan policy would cancel plans that are meeting people’s needs today and, as a result, force people to decide between buying coverage they cannot afford on the individual market or going uninsured,” said CMS Administrator Seema Verma. “By extending the grandmothered plan policy, we are following through on our commitment to protect those left behind by Obamacare.”
What is a grandmothered health plan?
Grandmothered plans are individual and small-group health plans that took effect after the Affordable Care Act was signed into law in March 2010, but before the exchanges opened for business in October 2013. (In some states, grandmothered plans include plans that were issued as late as the end of 2013.)
Originally under the ACA, the plan was to discontinue these policies at the end of 2013, or at their renewal date in 2014. However the uproar over plans being cancelled or changed losing their grandmother status after the Obama words, "If you like your plan, you can keep it" lead to a fix that has been extended 5 years running.
Grandmothered plans do not have to comply with many of the ACA’s provisions, but they cannot have annual or lifetime benefit limits for essential health benefits (EHB) that they cover (although they are not required to cover essential health benefits other than preventive care).
Keep in mind that grandmothered plans are not the same as grandfathered plans.
So what are grandfathered health plans?
Grandfathered plans are health plans that were already in effect as of March 23, 2010, when the Affordable Care Act was signed into law. In the individual market, they are plans that already covered the policyholder as of that date, and in the employer-sponsored market, they are plans that the employer had already implemented as of that date, and has continuously offered ever since, with at least one covered employee at all times. These types of plan too do not need to comply with the bulk of the ACA's provisions but cannot have lifetime limits on any essential health benefits they cover. (again they are not required to cover essential health benefits). Grandfathered plans can be kept indefinitely and cannot be forced to end by state or federal government force. Learn more about Frequently Asked Questions on grandfathered health plans and what is necessary to maintain them.
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