Fewer ‘Grandfathered’ Plans Under Affordable Care Act in 2013

Changes in company coverage reducing number of plans exempt from ACA provisions.

Many aspects of employer-provided healthcare plans in 2013 are largely unchanged from 2012, according to The Kaiser Family Foundation/Health Research & Educational Trust 2013 Annual Employer Health Benefits Survey. The percentage of plans exempt from some provisions of the Affordable Care Act, though, experienced a double-digit decline from the prior year.

In 2013, the average annual premiums for employer-sponsored health insurance for singles and families increased by a modest 5 percent and 4 percent from 2012 levels, respectively. Covered workers also face similar premium contribution levels and cost-sharing requirements this year, and the percentage of firms offering health benefits to at least some employees (57 percent) and the percentage of workers covered at those firms (62 percent) are statistically unchanged from 2012. 

A more dramatic change, according to the report, is the percentage of covered workers enrolled in “grandfathered” health plans, plans which are exempt from many provisions of the Affordable Care Act, which declined to 36 percent of workers in 2013 from 48 percent in 2012.

For a plan to be considered “grandfathered,” it must have already been in place when the ACA became law in March 2010, and the plan must not have undergone significant benefit or employee cost changes since then. As employees come and go and employers continue to make coverage adjustments, the percentage of worker plans exempt from the ACA will continue to decline. Fifty-four percent of firms said they shopped for a new health plan or carrier during the previous year, and of those, 18 percent changed carriers and/or the type of health plan they offered (15 percent).

The ACA exempts grandfathered plans from a number of its provisions, such as the requirement to fully cover preventive care or the new rules governing small employers’ premiums ratings and benefits.

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