Grandfathered Plans

Non-grandfathered plans may not impose annual or lifetime dollar limits on essential health benefits — The ACA prohibits non-grandfathered group and individual plans from imposing lifetime dollar limits on essential health benefits, and it phases out and then bans annual dollar limits on those benefits as well. A lifetime limit is a cap on the total amount a plan will pay over the insured's lifetime, and an annual limit caps the amount payable in a single plan year; both undermine the protection the policy is supposed to provide. The ban ensures that coverage for serious illnesses is not exhausted mid-treatment. Grandfathered plans receive limited transition relief, but the general rule is that dollar limits on essential benefits are prohibited.

National insurance concept

Satisfies the individual mandate requirement to maintain health coverage — Minimum essential coverage (MEC) is the coverage that satisfies the ACA's individual shared responsibility provision, meaning the coverage a person must have to avoid the federal penalty where applicable. MEC includes employer-sponsored group coverage, Medicare, Medicaid and CHIP, TRICARE and veterans' coverage, most individual and exchange plans, and grandfathered plans. Limited-benefit products such as accident-only or fixed-indemnity policies are generally not MEC. MEC is a coverage-status concept, not a guarantee that every medical expense is paid in full. Meeting the MEC threshold is a threshold question in every ACA enrollment, because it determines whether a consumer is protected from the individual mandate.

National insurance concept