If Your Health Insurance Is Grandfathered and/or Self-funded

If you bought your health insurance on your state’s insurance Marketplace, none of the information here applies to you. This information is for people with health insurance through work (employer-based plans), or older individual health plans from an agent or private source.

What is a grandfathered health plan?

Grandfathered plans are those that were being sold when the Affordable Care Act began to go into effect in March 2010 and haven’t made significant changes to the coverage they offer or the prices they charge.

The total number of grandfathered plans is shrinking, and over time there will be few, if any, grandfathered plans left. This is because they often change their coverage and/or price from year to year.

Companies that have had the same group plan in place since March 2010 can still enroll new employees if the plan hasn’t changed its coverage or premiums.

    If you’ve had your individual insurance plan or your employer has had the same plan since 2010 or earlier, it’s important to ask if it’s a grandfathered plan.

How are grandfathered plans different?

    Grandfathered plans might not cover certain preventive health services and other things required of newer plans.

    Grandfathered plans have pre-existing condition exclusions. A pre-existing condition is a health issue you had before you joined your health plan. In a grandfathered individual health plan, the pre-existing condition exclusion period could last for many years or even be unlimited. This means that the patient would have to wait a certain amount of time before the plan would pay any health care costs related to the pre-existing medical problem. Some individual plans refuse to cover certain pre-existing conditions such as cancer at all.

    Grandfathered plans can impose an elimination rider. That keeps a particular disease, body part, or body system from ever being covered by that policy – even if the illness started after the person signed up for the policy.

    If you have an individual health plan that doesn’t cover pre-existing conditions, or that doesn’t cover certain illnesses, you can switch to a Marketplace plan during the open enrollment period. You will need to contact your current insurance plan to find out how and when to cancel your grandfathered plan. Meanwhile, you can appeal their decisions to deny coverage.

    Grandfathered plans might have limits on annual costs

    Some individual (not group) grandfathered plans have dollar limits on the amount of money they’ll pay for a patient’s care each year. This can be a problem with many types of cancer, for which treatment is quite expensive. You may want to find out if you can change to a different policy if your individual insurance plan is grandfathered and has dollar limits on coverage.

    Cancer screening tests might cost more on grandfathered plans

    The ACA law requires covering cancer screening tests at little or no cost to the patient. But patients in grandfathered plans can have co-pays or co-insurance on their cancer screening tests that aren’t allowed in other plans. These are costs the patient must pay out of pocket for testing.

    Grandfathered plans might cost more if you have cancer

    Especially with individual plans, insurance companies often required proof of health before selling a health policy. People who had pre-existing health conditions often had to pay more (if they could buy a policy at all) than people without such health problems. If this applies to you, you might be able to shop for less costly insurance on your state’s Marketplace.

Self-Funded or Self-Insured Health Plans

The only way to be sure whether your job-based plan is self-insured is to ask. It’s important because self-insured plans have fewer rules, which might not be favorable to people with cancer.

In self-insured plans, the employer or union covers the cost of medical expenses for their employees and their families, rather than buying a health plan from an insurance company. Self-insured plans are sometimes called “self-funded plans”.

  • They do not have to cover “essential health benefits” required of other plans under the Affordable Care Act (ACA), although they do have to cover some of the prevention and wellness benefits.
  • Those that don’t cover essential benefits are also allowed to put dollar limits on medical costs.
  • If they offer dependent coverage, they must cover the children of their employees up to age 26.
  • They can limit how much they’ll pay for so-called non-essential benefits, too. But they aren’t allowed to place lifetime dollar amounts on the people they insure.

Because employers who self-insure their workers often hire an insurance company to process and manage their health claims, it can be hard to know if your employer self-insures unless you ask. If the company is self-insured, certain ACA law protections do not apply to your plan.

Before you get any treatment or preventive care, it’s a good idea to ask your insurance administrator how much of the care it will cover. It’s especially important to find out if they cover breast reconstruction after mastectomy and mental health services. College students on medical leaves of absence may also be affected. You will want to ask for a Summary of Plan Benefits so that you’ll have a better idea what is covered in the future.

The American Cancer Society medical and editorial content team

Our team is made up of doctors and oncology certified nurses with deep knowledge of cancer care as well as journalists, editors, and translators with extensive experience in medical writing.

State Health Care Marketplaces – US Department of Health and Human Services 
Toll-free number: 1-800-318-2596 (also in Spanish)
TTY: 1-855-889-4325
Website: www.healthcare.gov

US Department of Labor, Employee Benefits, Security Administration (EBSA)
Toll-free number: 1-866-444-3272
Website: www.dol.gov/ebsa

    Information on employee benefit laws, including COBRA, FMLA, and HIPAA requirements of employer-based health coverage and self-insured health plans. Also has information on recent changes in health care laws. Information for military reservists who must leave their private employers for active duty can be found at: www.dol.gov/elaws/vets/userra/mainmenu.asp

National Association of Insurance Commissioners
Toll-free Number: 1-866-470-6242
Website: http://naic.org/state_web_map.htm

    Offers contact information for your state insurance commission. You can contact your state insurance commission for insurance information specific to your state or to find out what you can do about problems with your insurance plan

Cancer Legal Resource Center (CLRC)
Toll-free number: 1-866-843-2572 (may need to leave a number for a call back)
Website: www.cancerlegalresources.org

    Provides free legal information about laws and resources for many cancer-related issues including health insurance issues, denial of benefits, and government benefits

Patient Advocate Foundation (PAF)
Toll-free number: 1- 800-532-5274
Website: www.patientadvocate.org

    Works with the patient and insurer, employer and/or creditors to resolve insurance, job retention and/or debt problems related to their diagnosis, with help from case managers, doctors, and attorneys. For cancer patients in treatment or less than 2 years out of treatment.

Last Medical Review: November 19, 2015 Last Revised: March 1, 2016

American Cancer Society medical information is copyrighted material. For reprint requests, please see our Content Usage Policy.