In November of 2013, the Centers for Medicare & Medicaid Services (CMS) introduced the concept of “grandmothered plans,” coverage in place prior to 2014 that would have been prohibited as of 2014 as a result of changes under the Affordable Care Act (ACA). CMS issued guidance permitting those plans to be renewed for existing policyholders if permitted by states.
Specifically, such plans are not considered to be out of compliance with ACA provisions related to:
- Fair health insurance premiums (Section 2701)
- Guaranteed availability and renewability of coverage (Sections 2702 and 2703)
- Prohibition of pre-existing condition exclusions and other discrimination based on health status (Section 2704)
- Prohibition of discrimination based on health status (Section 2705)
- Non-discrimination in health care (Section 2706)
- Comprehensive health insurance coverage (Section 2707)
- Coverage for individuals in approved clinical trials (Section 2709)
- Single risk pool (Section 1312(c))
Initially, CMS permitted grandmothered plans to be renewed for policy years starting as late as October 1, 2014. CMS subsequently extended grandmothered plans that have been continually renewed, most recently through policy years starting on or after October 1, 2017, provided that all such policies end by December 31, 2017.
On February 23, 2017, CMS issued a bulletin that, once again, extended grandmothered plans, allowing them to be renewed for policy years beginning on or before October 1, 2018, provided that all such policies end by December 31, 2018. Once again, this applies in states that also allow for such plans. States may also adopt the policy in a more limited manner. The guidance also sets forth consumer notice requirements.