Nov. 18, 2013 Compliance Observer – Health Insurance Issuers May Choose to Continue Coverage

Compliance Observer - Nov. 18

Health Insurance Issuers May Choose to Continue Coverage

On Thursday, November 14, 2013, President Obama announced changes to the Affordable Care Act that would allow insurance companies the option to continue offering consumers plans that would otherwise be cancelled in 2014. The administrative changes under this transitional policy are good for just one year, though officials said they could be extended.

The decision to adopt this transitional policy will be made on a state-by-state basis however states are being encouraged to do so. A letter to State Insurance Commissioners outlines the specifics of the transitional policy and the requirements insurance companies must follow should they choose to continue coverage that would otherwise be terminated or cancelled. (Letter to Insurance Commissioners)

It is unclear, at this time, what the impact of these changes will be for individuals and small businesses that have already been notified their plans are or will be cancelled and for insurance companies that have already planned for cancellations.

1. Question: Does this transition policy apply to coverage under a large group employer plan?

Answer: No. This policy only affects individuals and small group employer plans. A small group employer is defined as one who employed an average of at least 1 but not more than 49 employees on business days during the preceding calendar year. (NOTE: As of 2016, the definition will change to be up to 100 employees)

2. Question: Which individual and small group plans qualify for the transition relief?

Answer: Only plans that were in effect on October 1, 2013 will qualify for the relief. The relief does not apply to new plans that went into effect after October 1, 2013.

3. Question: Does my insurance provider have to continue my current policy?

Answer: No. First, your state insurance regulator must approve for insurance policies to be continued under this transition relief policy. If approved by your state insurance regulator, then your insurance provider must decide whether or not to allow you to continue your current coverage, but they are not required to do so under this relief.

4. Question: If my insurance provider does agree to continue my coverage am I guaranteed to pay the same premium?

Answer: No. Early predictions indicate premiums will probably increase for coverage that is continued.

5. Question: Does this policy apply only to those policies that renew on January 1, 2014?

Answer: No, the transition policy applies to individual and small group policies that have a renewal date of January 1, 2014 to October 1, 2014.

We anticipate guidance from the State Departments of Insurance as to whether they will adopt this policy and allow continuation of current insurance coverage. Once the state determination is made, insurance carriers will then need to determine if they will continue to offer the current policies.

Your AssuredPartners NL Benefit Team will continue to monitor this policy and provide you with updated information and guidance, as it becomes available.

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