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Grandfathered Health Plans
Frequently Asked Questions
Does DIFS have guidance on the process to withdraw grandfathered health plans from the Michigan market?
Use the process outlined in subsection (4) of MCL 500.2213b, which was added by 2013 PA 5. Note that there is a requirement of 90-day notice of discontinuance to the DIFS Director as well as to each covered individual. The withdrawal notification filing through SERFF must contain the issuer’s notice of discontinuance to policyholders. There is no specific wording required by DIFS in this notice.
Are there any specific consumer notices relative to grandfathered plan withdrawal?
Issuers must notify DIFS and the covered individual using the process in MCL 500.2213(b).
Do issuers have to make any specific filings to withdraw grandfathered health plans?
A withdrawal notification filing through SERFF is required.
Do all grandfathered plans have to be renewed if the employer would like to keep the plan?
The Health Insurance Portability and Accountability Act of 1996 (HIPAA), as amended by the Affordable Care Act (ACA), imposes guaranteed renewability obligations, which are described in Bulletin 2011-17-INS. Terminating these plans would need to follow the regulation for terminating a particular product (See 45 CFR §§ 146.152, 148.122). An issuer that terminates a particular product must give 90 days’ notice to plan sponsors or individual policyholders (as applicable); must offer the plan sponsor or individual the option to purchase, on a guaranteed issue basis, all other coverage the issuer offers in the market; and must discontinue the product uniformly, without regard to claims experience or health status of participants, dependents of beneficiaries under a particular health plan. 45 CFR § 146.152 (c).
Are small group, grandfathered plans still subject to chapter 37 of the Michigan Insurance Code?
Chapter 37 of the Michigan Insurance Code, along with other chapters of the Code, governs grandfathered, small employer group coverage; however, some of the federal market reforms apply to grandfathered plans , therefore, issuers are subject to federal regulations; these include: young adults can stay on their parent’s health plan unless the young adult is eligible for their own job-based coverage; prohibition on lifetime limits in coverage; prohibition on unfair rescissions of coverage; prohibition on preexisting condition exclusions and coverage denials; The addition of these consumer protections do not cause a plan to lose its grandfathered status.