This chart contains an illustrative summary of some of the new health reform provisions and does not cover all the
specifics of the provisions. This chart provides an informal explanation of the new health reform provisions and should
not be considered legal advice or interpretive guidance.
Application of the New Health Reform Provisions of Part A of Title XXVII of the PHS Act to Grandfathered Plans
PHS Act Section Summary of Provision Application to Grandfathered plans
§2701 Fair health insurance
premiums
Health insurance issuers may not charge
discriminatory premium rates. The rate may
vary only by whether such plan or coverage
covers an individual or family, rating area,
actuarial value, age, and tobacco use.
Not applicable; also does not apply
to large group insurance market
coverage in States that do not
allow such coverage to be offered
through the State exchanges.
§2702 Guaranteed availability of
coverage
Health insurance issuers in both the individual
and group markets must accept every employer
and individual in the State that applies for
coverage, but are permitted to limit enrollment
to annual open and special enrollment periods
for those with qualifying lifetime events.
Not applicable
§2703 Guaranteed renewability
of coverage
Requires guaranteed renewability of coverage
regardless of health status, utilization of health
services, or any other related factor. Coverage
can only be cancelled under specific,
enumerated circumstances.
Not applicable
§2704 Prohibition of preexisting
condition exclusion or other
discrimination based on health
status
Group health plans and health insurance issuers
offering group or individual coverage may not
impose a preexisting condition exclusion or
discriminate based on health status.
Applicable to grandfathered group
health plans and group health
insurance coverage.
Not applicable to grandfathered
individual health insurance
coverage.
§2705 Prohibiting discrimination
against individual participants
and beneficiaries based on health
status
Retains the HIPAA
1
nondiscrimination
provisions for group health plans and group
health insurance issuers. Specifically, plans and
group health insurance issuers may not set
eligibility rules based on factors such as health
status and evidence of insurability – including
acts of domestic violence or disability. Provides
limits on the ability of plans and issuers to vary
premiums and contributions based on health
status.
The Affordable Care Act adds new provisions
regarding wellness programs and extends all the
nondiscrimination protections to the individual
market.
The HIPAA nondiscrimination
provisions are applicable to
grandfathered group health plans
and group health insurance issuers.
The new Affordable Care Act
extensions are not applicable to
grandfathered group health plans
and group health insurance
coverage.
Not applicable to grandfathered
individual health insurance
coverage.
§2706 Nondiscrimination in
health care
Prohibits discrimination by group health plans
and health insurance issuers against health care
providers acting within the scope of their
professional license and applicable State laws.
Not applicable
§2707 Comprehensive health
insurance coverage
Requires health insurance issuers in the small
group and individual markets (and large group
markets in State exchanges) to include coverage
which incorporates defined essential benefits,
provides a specified actuarial value, and requires
all group health plans to comply with limitations
on allowable cost sharing.
Not applicable
1
HIPAA is the Health Insurance Portability and Accountability Act of 1996.