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Is Your Health Plan 'grandfathered'? You May Be Getting Gypped

Under the Affordable Care Act, health insurance plans must fully cover preventive care without charging members anything out of pocket.

But there's one big exception that affects almost half of today's workers.

If a health plan is "grandfathered," it doesn't have to follow this and a handful of other Affordable Care Act provisions. According to the recent Kaiser Family Foundation/Health Research & Educational Trust 2012 Employer Health Benefits Survey, 48 percent of covered workers are in grandfathered plans this year, down from 56 percent last year.

A grandfathered group plan is one that your employer established before March 23, 2010, and has not changed substantially since then. To maintain a health plan's grandfathered status, an employer can't significantly increase your out-of-pocket costs, such as your deductible, or reduce your benefits.

Individual plans -- the kind you buy for yourself instead of getting through an employer -- can also be grandfathered. If your individual plan covered you on or before March 23, 2010, then it can be grandfathered.

A job-based grandfathered plan still can sign up new employees, so even if the employer plan is new to you, it could be grandfathered.

Rules for grandfathered health plans

Unlike other health plans, grandfathered plans don't have to:
  • Fully cover preventive care. A grandfathered plan can still charge you a copayment, deductible and co-insurance for preventive care.
  • Provide access to an obstetrician or gynecologist without a referral.
  • Let you get emergency care outside the health plan's network without prior authorization.
  • Give you additional rights for appealing health plan denials. Non-grandfathered health plans must give you the right to an external review if the health plan rejects your appeal.

In addition, individual grandfathered plans avoid a couple of other requirements. They still can put annual dollar limits on coverage, and they can exclude pre-existing conditions from coverage for children under 19.

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