Grandmother Bill Signed Into Effect

A big win for small business health coverage took place under the “grandmother” bill signed into effect today by Governor Jerry Brown Jr.

This bill states that small business employers that have non-grandfathered health policies signed into effect before December 31, 2013 now have the option to renew their policy for another year as long as those policies are still in force as of July 7, 2014 (the day the grandmother bill took effect). This means that they will not be forced to find another health plan by the end of 2014. This bill only applies to small businesses with 50 or fewer employees. Now these small businesses will have the option to continue with their existing grandmothered plan up until the end of 2015 (December 31, 2015 to be exact).

Why did this change occur?

  • This state law took effect so it would be closer in line to the federal health exchange policy that is transitioning much more slowly. California wanted to be compliant with the federal health law time table for enacting procedures under the Affordable Care Act.

Who does this help?

  • Small businesses that opted to early renew their health plans in 2013. This bill only applies to small groups that did not already purchase a healthcare policy on the state exchange.

It’s also important to note that this grandmother bill does not apply to “grandfathered plans” existing prior to March 2010. It only applies to small group health plans that did early enrollment in 2013. This grandmother bill gives these employers the option to renew their health plans for another year. Still, the plan benefits must be compliant with state based and ACA mandated benefits such as preventative care and elimination of gender discrimination.

If you have questions regarding whether you are eligible to renew in your small group health insurance policy for another year under this grandmother bill, please feel free to contact us with any questions.

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