Grandfathered health plans are those that were in existence on March 23, 2010 and have not undergone certain prohibited design changes in the intervening time. These plans are excused from some of the requirements put in place by the Affordable Care Act (ACA), such as coverage of preventive health services without any cost-sharing and the expanded appeals process and external review.
The three areas we would like to focus on today include lifetime maximums, mental health parity, and preexisting conditions exclusions; all areas where grandfathered plans are subject to the same rules as non-grandfathered plans.
Question 1
Can a grandfathered plan still have a lifetime maximum for individual enrolled members?
Response 1
No, a grandfathered plan cannot impose a lifetime maximum for individual enrolled members. The prohibition on annual and lifetime dollar limits/maximums applies to both grandfathered and non-grandfathered plans. While there was a phase-out transition period for these types of limits, currently no plan (grandfathered or non-grandfathered) can have a lifetime limit anymore.
Question 2
Can a grandfathered plan still pay outpatient mental health visits at a lower rate than that of sick office visits for enrolled individual enrolled members?
Response 2
Brief Answer
In general, if the Plan is an ERISA plan, then the answer is no if the above setup would be in violation of the Mental Health Parity and Addiction Equity Act (MHP) rules detailed below.
Analysis
ERISA plans including both grandfathered ERISA plans and non-grandfathered ERISA plans are generally subject to the MHP rules. By contrast, non-ERISA plans are typically exempt from the MHP rules; however, more recently, even non-ERISA plans may be subject to MHP. See: https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/non_federal_governmental_plans_04072011.html.
ERISA self-funded plans are not required to cover mental health/substance use disorder benefits, but if they do, the plan must comply with the Mental Health Parity and Addiction Equity Act (MHP) rules. The MHP rules detail that mental health/substance use disorder benefits must be covered in parity with medical/surgical benefits. In addition, financial requirements (i.e. copays, coinsurance, and deductibles) that apply to mental health/substance use disorder benefits must be no more restrictive than the predominant financial requirement that applies to substantially all (two-thirds) medical/surgical benefits (“substantial/predominant test”).
Question 3
Can a grandfathered plan still have pre existing conditions language that are being imposed?
Response 3
No, the ACA’s prohibition on pre-existing conditions applies to both non-grandfathered and grandfathered plans. The only exception to this pre-existing coverage rule is for “grandfathered” individual health insurance policies (“[a] grandfathered individual health insurance policy is a policy that you bought for yourself or your family on or before March 23, 2010 that has not been changed in certain specific ways that reduce benefits or increase costs to consumers.”). See: https://www.hhs.gov/healthcare/about-the-aca/pre-existing-conditions/index.html.
This document is for general informational purposes only. While we have attempted to provide current, accurate and clearly expressed information, this information is provided “as is” and BRMS makes no representations or warranties regarding its accuracy or completeness. The information provided should not be construed as legal or tax advice or as a recommendation of any kind. External users should seek professional advice from their own attorneys and tax and benefit plan advisers with respect to their individual circumstances and needs.
