Health plans in the individual and small group markets that were issued after March 23, 2010 and prior to January 1, 2014 are commonly referred to as grandmothered plans. March 23, 2010 is the date the Affordable Care Act (ACA) was signed into law while January 1, 2014 is the so-called full implementation date of the ACA.
Grandmothered plans were supposed to be terminated on the full implementation date of the ACA because they failed to satisfy all of the ACA’s market reforms, but the federal government has offered temporary, transitional relief which has allowed these plans to continue to exist. This relief was set to expire later this year, but the Centers for Medicare and Medicaid Services (CMS) has indicated they are authorizing an additional extension. This is now the fourth extension that has been authorized.
In a recently issued bulletin, CMS announced that grandmothered plans can continue to be renewed for plan years beginning on or before October 1, 2019, provided that the plans end by December 31, 2019. States and insurance carriers must also agree to the extension. In other words, the CMS guidance is an option for states and carriers, not a requirement. Additionally, a state or carrier may choose to extend grandmothered plans in just the individual market, just the small group market, or both markets. We should expect to see guidance in the near future.
It should be noted that this guidance has no impact on grandfathered plans which were in effect on or before March 23, 2010. Grandfathered plans can continue to exist permanently without having to comply with all of the ACA’s market reforms.