HORAN Health Benefits Compliance Blog

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Transition Policy Extended for Non-ACA Compliant Health Plans

 March 6 2017     Diane Cross
Once again, the Department of Health and Human Services (HHS) has extended the transition policy for certain small employer health plans that do not comply with the Affordable Care Act (ACA) for an additional year. Health insurance issuers can renew non-ACA compliant coverage through 2018 for those plans that have so far avoided community rating and other ACA provisions if the state chooses to extend relief.

Impact to Employers
Individuals and small businesses may be able to keep their non-ACA compliant coverage through 2018, depending on the plan or policy year. This extension applies to policy years beginning on or before October 1, 2018, provided that all policies end by December 31, 2018. Under the extended transitional policy, health coverage in the individual or small business market that meets certain criteria will not be considered to be out of compliance with ACA regulations.

The extended transition relief only applies with respect to individuals and small businesses with coverage that has been continually renewed since 2014, under the previous transition guidance. It does not apply to individuals and small businesses that obtained new coverage in 2014 or after.

Notices to Individuals and Small Businesses

As required under the previous transition policy guidance, health insurance issuers that renew coverage under this extended transitional policy must, for each policy year, provide a notice to affected individuals and small businesses. The guidance issued by CMS provides two versions of the notice for this purpose, one for use when a cancellation notice has already been sent, and one for use when a cancellation notice has not yet been sent. Per HHS, these required standard notices cannot be modified.

HHS anticipates this additional one-year extension will help to smoothly bring all non-grandmothered coverage in the individual and small business markets into compliance with all applicable ACA requirements. Keep in mind that with Congress working towards the ACA repeal, ACA compliance may never be required for these plans. HORAN will continue to monitor to get the most up to date guidance moving forward.

Please contact your HORAN account representative with additional questions.