Transition Policy Extended for Non-ACA Compliant Health Plans, Once Again

 April 8 2019     Diane Cross

Since 2013, 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). Per recent guidance from Centers for Medicare & Medicaid, health insurance issuers can renew non-ACA compliant coverage through 2020 for those plans that have so far avoided community rating and other ACA provisions in states that choose to extend relief. 

Impact to Employers

Individuals and small businesses may be able to keep their non-ACA compliant coverage through December 31, 2020, depending on the plan or policy year. This extension applies to policy years beginning on or before October 1, 2020, provided that all policies come into compliance by January 1, 2021. 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 to individuals and small businesses with coverage that has been continually renewed since 2014, as 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 Keep in mind that if the ACA is repealed, replaced or amended, ACA compliance may never be required for these plans.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.