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Covered California and Obamacare related questions from consumers, employers and agents are answered by Phil Daigle with the best information available at the time. Archived entries may no longer be accurate as the Covered California and Obamacare knowledge-base is evolving quickly. TO REQUEST A PERSONAL RESPONSE INCLUDE EMAIL ADDRESS.

Grandfathered Coverage and Rates

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Question: It is my understanding that individual health plans that were originated prior to 3/23/2010 will have grandfathered status and insureds will be able to keep these plans when the CA exchange kicks in 1/2014. My question, what about individual plans originated after 3/23/10 to 12/2013, can insureds keep these plans (even if they don’t meet essential coverage requirements), or are they going to be required to select a metal plan in 1/2014? If so, this could potentially result in a higher premium if insured is not eligible for subsidy.

Answer: The “grandfather” option is available for all plans in existence on March 23, 2010, that have continuously covered someone since that date, and have not taken any restricted actions under the regulations. The major benefit to grandfathering a health plan is that grandfathered plans have the ability to avoid several mandates and thus avoid the increases in healthcare costs associated with those mandates. Non-grandfathered plans will cease to exist, so yes you will have to select a conforming qualified health plan in 2014 if you are not covered by a grandfathered plan. The rates for the conforming QHPs will be higher than current rates, but grandfathered plans will face increases as well, so what the difference may be is anybody’s guess at this point. We can expect the see the rates for QHPs in late May or June 2013.

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