Anthem BCBS in New Hampshire has decided to allow plans coming up for renewal beginning on October 1, 2014 through the fourth quarter of this year to be renewed, even though the plans do not meet all of the Affordable Care Act’s requirements, in response to President Obama’s announcement of that option. People are referring to this group of plans as “grandmothered plans”.
Before there were grandmothered plans, there were grandfathered plans. Let’s review what a grandfathered plan is. A grandfathered plan is a health plan that existed on March 23, 2010 when the ACA was signed into law. Grandfathered plans were exempted from some of the rules and protections of the ACA to make the transition to the healthcare reforms easier for individuals and businesses. Grandfathered plans still have to follow some ACA requirements, though, such as allowing dependent children to remain on their parents’ plans until the age of 26 and guaranteeing no lifetime dollar limits on benefits. However, many insurers decided to cancel existing plans instead of continuing to offer them.
Since several insurers elected not to offer the grandfathered plan option and many plans were being cancelled, the government recognized the need for another option, leading to President Obama’s decision to allow more plans that do not meet the ACA’s requirements to be renewed. Many people know this as the “keep your plan” extension, but it’s also referred to as a “transitional plan” and the plans impacted are the grandmothered plans.
President Obama announced on November 14, 2013, that a business or individual could keep their current coverage for one additional year, but states would still have the authority to authorize which plans could be sold. Later, that was extended to two years. The President said that with the renewals the insurers are required to inform their customers of two things: the ACA protections not included with these renewed plans and the new options offered on the Marketplaces that provide both better coverage and tax credits that may lower costs.
Anthem will be offering the grandmothered plan option for their plans renewing in the fourth quarter of this year. At their discretion, other insurers may also be offering this option. However, you will need to call your insurer to obtain additional information.
Stay tuned for my next blog, which will include updated information regarding Stand Alone Dental Plans (SADPs). We are excited to report there have been over one million individual plans sold nationwide, and about 4,500 sold across Maine, New Hampshire and Vermont.