ACA Consumer Protections for Private Coverage

How to Know If the ACA Consumer Protections Apply to Your Private Coverage

The Affordable Care Act includes rules and consumer protections for private health coverage, as outlined in the table below. Although the Affordable Care Act focuses primarily on consumer protections in the individual and small group market, there are rules for large employer-sponsored plans, as well. How these rules apply to health coverage depends on a number of factors, including whether the coverage is provided to employer groups or individuals; whether the employer groups are large or small; whether the group is self-insured or fully insured; and whether the plan is “new,” “grandfathered” or "grandmothered." For more on the different types of coverage, see the information below the table. Application of ACA Rules Across Types of Coverage and Markets

Provision Individual Market Small Group Market Large Group Market Self-Insured Transitional or Grandmothered
Short-term plans and Health Care Sharing Ministry Plans
Guaranteed Issue and Renewal
Insurers must accept every individual or employer that applies for coverage, and cannot refuse to renew coverage based on claims or health status.
Yes Yes Yes No No
No No
Pre-existing condition exclusions
Prohibits insurers from excluding pre-existing conditions from covered benefits under the plan.
Yes Yes Yes Yes No for the individual market (except for children under 19)
Yes for the small group market
Yes except individual market plans No
Waiting periods
Group health plans cannot impose a waiting period of more than 90 days for coverage to begin.
N/A Yes Yes Yes Yes
Yes No
Rating Rules
Insurers can only vary rates based on age, tobacco use, geographic area and family composition. They cannot vary rates based on health status.
Yes Yes No No No
No No
Essential Health Benefits
Insurers must provide coverage that includes 10 categories of defined benefits.
Yes Yes No No No
No No
Coverage levels
Coverage must provide a minimum level of financial protection, and must be offered at specified coverage levels.
Yes Yes No No No
No No
Dependent coverage to age 26
Health plans must allow adult children up to age 26 to remain on the family plan.
Yes Yes Yes Yes Yes
Yes No
Out-of-pocket maximums
Plans must cap out-of-pocket costs annually at $8,700 for an individual and $17,400 for a family in 2022.
Yes Yes Yes YesNo No No
Preventive Services
Plans must cover recommended preventive services at no cost-sharing.
Yes Yes Yes Yes Yes
No No
Annual and Lifetime Limits
Plans cannot impose annual or lifetime limits on benefits.
Yes Yes Yes Yes Yes
Lifetime limits: Yes Annual limits: Yes, except for grandfathered individual coverage No

Types of Private Health Coverage: There are two main types of private health coverage: employer-sponsored insurance and coverage sold to individuals.

Employer-sponsored coverage: most people who have private coverage in the U.S. have coverage through an employer. More than 56 percent of Americans under age 65 have coverage through an employer-sponsored plan.

Insured vs. self-insured employer-sponsored coverage: private health coverage is generally provided by state-licensed health insurers and self-insured (sometimes called self-funded) employer health plans.

  • Fully insured plans are those in which health insurers collect premiums for each enrollee in the group in exchange for providing coverage for medical services.
  • Self-insured plans are sponsored by an employer and/or employee organizations and the sponsor directly pays for enrollees’ health claims. The plan sponsor – not an insurer – assumes the financial risk of providing coverage for the plan enrollees. Self-insured plans are exempted from many of the Affordable Care Act’s health insurance reforms.
  • Large employers vs. small: Current legislation defines a small employer as having at least one, but no more than 50 employees. States, however, can elect to extend the definition of small employer to 100 employees. Most states define small employer to mean one who has one to 50 employees. Many of the Affordable Care Act’s health insurance reforms apply to small employers but not large employers.

Individual health coverage: Plans sold to individuals directly, and not through an employer, make up the individual market (sometimes called the non-group market). Plans may be sold to a single person or to a family. Most of the Affordable Care Act’s health insurance reforms apply to individual health coverage.

Transitional or Grandmothered plans: While the Affordable Care Act aims to increase access to individual and small group health insurance via reforms such as prohibiting discrimination based on pre-existing conditions, current federal policy permits states to continue the existence of individual and small group health plans that are not required to comply with all the Affordable Care Act protections until January 1, 2023. Referred to as transitional or “grandmothered” policies, a majority of states allow individuals and small groups to keep these noncompliant policies in force, so long as they were in effect since 2014, renewed on or before October 1, 2021, and also meet requirements to provide notice to enrollees. These policies are not allowed to extend past December 31, 2022.

Short-term, Limited Duration plans: This is a type of health insurance coverage that was primarily designed to fill gaps in coverage that may occur when an individual is transitioning from one plan or coverage to another plan or coverage, such as in between jobs. This type of coverage is exempt from the Affordable Care Act's consumer protections that apply to the individual market. These plans are shorter than 12 months and can be renewed for up to 36 months, but states can further limit the scope of these plans. For more information, contact your state department of insurance.

Health-Care Sharing Ministry plans: Typically health sharing ministries operate by having all of their members pay a monthly “share” or fee. Those fees are then used to pay other members’ medical bills, if they qualify and if the reason for needing care was not due to “un-Christian” behavior. Health care sharing ministries do not have to comply with the consumer protections outlined in the Affordable Care Act, and many states have exempted them from the state’s insurance laws.

Individuals with no coverage
Individuals with coverage
Coverage for small employers
Post enrollment issues