Definition - What does Grandfathered Plan mean?
A grandfathered plan is an insurance policy that was put into place before a new law came into existence which could change requirements for the plan. If grandfathered plans retain their grandfathered status, then they can remain legitimate and in compliance with the law even if they do not meet the new standards put in place.
Insuranceopedia explains Grandfathered Plan
Many health plans that were in existence before the Affordable Care Act was put into place by the Obama administration are grandfathered plans. Despite the fact that these plans may not comply to the new standards set by the Affordable Care Act, they are allowed to continue on legally because they have grandfather status. However, it is possible for a plan to lose its grandfather status if changes are made to it, such as major alterations in costs or benefits.
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