Grandmothered plans are the name commonly used for health insurance plans in the individual and small group markets that were issued after the Affordable Care Act (ACA) was signed into law (March 23, 2010) and before the so-called full implementation date of the law (January 1, 2014).

Grandmothered plans do not fully comply with all of the required provisions of the ACA; however, the federal government has issued several extensions allowing these plans to continue to exist. In a recent announcement, the Centers for Medicare & Medicaid Services (CMS) indicated grandmothered plans may continue to exist until they announce that these plans must comply with all relevant ACA provisions.

It should be noted that the continued extension of grandmothered plans is not a requirement. Each state has the right to determine if grandmothered plans may continue to exist, and if a state does grant the extension, each health insurance carrier operating in that state can determine if they will continue to offer grandmothered plans. Some states and health insurance carriers have discontinued grandmothered plans in prior years.

Some of the ACA rules that grandmothered plans are exempt from include the premium rating rules, guaranteed availability and renewability of coverage, and the requirement to cover all essential health benefits. Unless or until CMS announces that grandmothered plans must comply with these requirements, grandmothered plans will have an exemption from these provisions. Grandmothered plans will cease to exist if CMS ever discontinues their extension of availability.

Grandfathered plans, on the other hand, can continue to exist permanently. Grandfathered plans are the name used to describe health insurance plans that were in force on or before March 23, 2010. Grandfathered plans are subject to limited changes that can be made each year to the plan design (such as minor cost-sharing changes). Due to the limited changes that can be made to a grandfathered plan, fewer and fewer of them exist each year. Grandfathered plans are exempt from certain ACA provisions, such as the requirement to cover preventive care without any cost-sharing, expanded appeals processes, and external reviews.