What characterizes a grandfathered health plan?

A grandfathered health plan is defined as a plan that was in existence on March 23, 2010, the date the Affordable Care Act (ACA) was signed into law, and has not undergone major changes since such as significant benefits reduction, increased cost-sharing, or elimination of coverage for particular conditions. These plans are allowed to maintain their previous status without needing to comply with many of the ACA's mandates, thus offering some flexibility in terms of coverage options.

This classification allows consumers with existing plans that meet the grandfathered criteria to retain their current coverage without having to switch to a plan that adheres to all ACA regulations. The other options do not accurately describe the concept of grandfathered plans since they either misinterpret when the plans must have been created or how they relate to ACA compliance and regulations.