What defines a Grandfathered Health Plan?

A Grandfathered Health Plan is defined as a health insurance plan that was in existence before the Affordable Care Act (ACA) was enacted on March 23, 2010. These plans are not required to comply with certain provisions of the ACA, such as mandatory coverage for preventive services or essential health benefits. The defining characteristic is based on the original issuance date of the plan, which allows it to remain exempt from some ACA regulations as long as it maintains its grandfathered status. This status can be lost if significant changes are made to the plan, such as increasing cost-sharing or decreasing benefits, which would require the plan to comply with ACA standards.

Understanding this concept is crucial because it affects the coverage options available to consumers, especially those who may wish to keep their existing plans without the changes mandated by the ACA.