What is a grandfathered benefit plan under the Affordable Care Act (ACA)?

Author: Jayne Zanglein, Western Carolina University

A grandfathered plan is a plan that was in existence on March 23, 2010, the date the ACA was enacted. Grandfathered plans are not required to comply with some of the requirements of the ACA such as offering recommended preventive care with no cost sharing and establishing protection for individuals appealing claims.

However, grandfathered plans are required to comply with the provisions of the ACA that came into effect after September 23, 2010, including:

  • No lifetime limits on coverage;
  • No rescissions of coverage when people get sick and have previously made an unintentional mistake on their application;
  • Requirements for adult dependent coverage;
  • No pre-existing condition exclusion requirements; and
  • No restricted annual limits (e.g., annual dollar amount limits on coverage below standards).

A plan can lose grandfathered status if it eliminates or substantially reduces benefits or significantly increases out of pocket expenses.