An ACA grandfathered health plan is best described as a plan that:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
A grandfathered plan is a group or individual health plan that was in existence on the date the ACA was enacted and has maintained continuous enrollment without making changes that significantly reduce benefits or increase cost-sharing for enrollees. Grandfathered status exempts a plan from certain ACA requirements, but the plan must disclose its status to enrollees and can lose it by impermissible changes such as removing covered benefits or materially raising cost-sharing. Option A captures both the origin and the continuity requirement, making it the correct description.
Why the other options are wrong
- B) Plans issued after the ACA's enactment cannot be grandfathered, and grandfathered status has nothing to do with seniors declining Medicare Part B. Only plans already in force at enactment can hold the status, so newer plans cannot qualify.
- C) Self-funded plans are governed by ERISA at the federal level, but grandfathered status is a separate ACA concept and does not exempt any plan from all state insurance laws. ERISA governs self-funded plans, but grandfathered status is an ACA concept with its own scope.
- D) Adding new employees does not automatically revoke grandfathered status; only changes that significantly reduce benefits or increase enrollee cost-sharing trigger revocation. Hiring new workers leaves the plan's benefit structure unchanged and does not revoke the status.
Memory hook
Grandfathered = the plan that was already there on Day One and hasn't dared to change its ways.