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

All health insurance plans, whether they're grandfathered or not, have to extend coverage to adult children up to age 26. However, until 2014, grandfathered group plans don't have to extend that coverage if the young-adult dependent has access to job-based health benefits elsewhere.

The fact that almost half of workers are still in grandfathered plans doesn't surprise Judy Waxman, the National Women's Law Center vice president for health and reproductive rights. The center is a strong proponent of the Affordable Care Act.

"It's right on target for what I expected," she says. "It's only been two and a half years (since the health care reform law was passed) and already half are not grandfathered. I think we're coming along nicely."

And some grandfathered health plans are providing more protection than they have to, Waxman says. Her employer's health plan is grandfathered but fully covers preventive care, including preventive services for women, without charging a copayment, deductible or coinsurance. The law's requirement for non-grandfathered plans to fully cover general preventive care went into effect two years ago, and the requirement to cover a specific list of women's preventive care services, including birth control, went into effect in August of this year. More information is in: "Ladies: More medical care without health insurance co-pays coming in 2012."

The outlook for grandfathered health plans

A health plan can stay grandfathered indefinitely, but most plans offered by midsize and large employers will probably lose that status in the next two years, says Julie Stone, a senior consultant for Towers Watson, a global consulting firm. To maintain grandfathered status, an employer can't increase the plan's costs for workers -- a tough limitation for companies in the midst of rising health care costs.

Stone says most employers who maintained grandfathered status did so as a strategic move to keep their options open while they evaluated how to move forward.

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