Health Care Reform

The Value of Grandfathering

The benefit of being grandfathered is an exemption from certain plan design mandates. (The plan must comply with these provisions once it no longer qualifies for grandfathered status.)  You may want to review each requirement and consider whether it would be important for your plan to maintain grandfathering for that provision.  You may want to mark each as follows:

  1. Very important to be grandfathered
  2. Somewhat important to be grandfathered
  3. Not important

In other words, if it would be very difficult or expensive for your plan to comply with a particular requirement, you would mark that it is very important to be grandfathered and therefore not have to comply with that provision.  However, if most provisions end up with labels of “not important,” that would indicate that grandfathering would not necessarily add much value for your plan.

The benefit of not trying to maintain grandfathered status is greater flexibility in making plan changes, such as to help manage rising health care costs.

At the same time, maintaining grandfathered status means that you will be prevented from making certain plan design changes.  You may want to evaluate whether the cost of these restrictions outweighs the cost of complying with additional plan design mandates for non-grandfathered plans.

Grandfathered plans receive an exemption from the following plan design mandates:

 

Required for Non-Grandfathered Plans on/after September 23, 2010:

In connection with the requirement to cover adult children to age 26 that also takes effect for plan years beginning on or after September 23, 2010, a grandfathered plan is not required to extend coverage to an adult child who is eligible for other employer-sponsored coverage.  However, that limited exemption expires for plan years beginning on or after January 1, 2014.

Required for Non-Grandfathered Plans on/after January 1, 2014:

Grandfathered plans must comply with all of the other plan design mandates.

American Fidelity Assurance Company does not provide tax or legal advice.

ESB-898(0713)

Next Steps

Sign up for Updates

VIP Notification Service

We provide a VIP Notification Service to keep you informed as new Health Care Reform rules are issued.
Click here to sign up.

You’re Not Alone

We understand that these new requirements come at a time of strained budgets. 
Learn how our services and products can help.

Get the Facts

Our most commonly asked Health Care Reform questions, along with the answers.
Learn More

Quick Access

  • Your Account

    View your policies, download forms and check the status of your claims - all in one spot!

  • Claim & Flex Forms

    1Select the forms you need:

    Flex Benefits
    Accident Benefits
    Cancer Benefits
    Critical Illness
    Disability Benefits
    Hospital Indemnity
    Life Benefits
    Medical (GAP)
    HRA Benefits

    2Select your state & industry:

  • Check Claim Status
  • FAQs

    Please select a category or type your question in the box below.

    Keyword Search
    All FAQs