What is a "grandfathered plan" under the Affordable Care Act?

A "grandfathered plan" under the Affordable Care Act (ACA) refers specifically to a health insurance plan that was in existence before the ACA was signed into law on March 23, 2010, and has not undergone major changes since that time. This status allows such plans to maintain certain benefits and protections that might not be available under new plans created after the ACA was enacted.

Grandfathered plans are allowed to continue operating without having to comply with all of the ACA's new requirements, such as certain coverage mandates and consumer protections. However, if a significant change is made to the plan, such as cutting benefits or raising co-insurance charges, the plan may lose its grandfathered status and will then be subject to the new regulations set forth by the ACA.

The other choices don't accurately reflect the definition or implications of a grandfathered plan:

• An enhanced benefits plan refers to increases or improvements in coverage which would typically disqualify it from being considered grandfathered.
• A plan that cannot be offered to new members refers to restrictions on enrollment rather than criteria defining grandfathered status.
• Lifetime coverage for all services is not a condition of grandfathered plans and does not specifically relate to the regulations introduced by the ACA.

Understanding the