If an employers’ current health plan was in place on or before March 23, 2010, and no changes have made to the plan after that date beyond what the ACA allows, it is grandfathered, and exempt from some ACA requirements. If the plan qualifies as grandfathered, the employer can keep their current coverage. If an employer purchased their current plan after that date, they will need to understand and respond to the significant changes.
In order for a group plan to remain grandfathered, the employer must not have done any of the following:
- Eliminate all, or substantially all, benefits to diagnose or treat a particular condition.
- Increase the percentage of member cost-sharing requirements above the level it was on March 23, 2010. For example the employer cannot:
- Increase deductibles or out-of-pocket limits by an amount that exceeds medical inflation plus 15 percentage points, based upon the plan rate in effect on March 23, 2010. For example, if medical inflation is 3 percent, an increase of 19 percent or more in the deductible or out-of-pocket maximums would cause a plan to lose grandfather status.
- Increase a coinsurance amount from 20 percent to 25 percent.
- Increase a copayment by an amount that exceeds medical inflation plus 15 percentage points (or, if greater, $5 plus medical inflation), based upon the plan rate in effect on March 23, 2010.
- Decrease the employer contribution toward the cost of coverage by more than 5 percentage points.
- Add or decrease an annual limit (except to replace an overall lifetime limit).1
If an employer has made any of these changes since March 23, 2010, they must offer a plan(s) upon their renewal that complies with the ACA requirements.
To learn more or to complete the form, visit Group Grandfathering Notice of Intent page.
1 United States Department of Labor. Group Health Plans and Health Insurance Coverage Relating to Status as a Grandfathered Health Plan Under the Patient Protection and Affordable Care Act: Interim Final Rule and Proposed Rule [6/17/2010]. CareFirst accessed this information on September 29, 2014.
This information is provided for informational purposes only and should not be relied on as legal or tax advice.