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Executive Summary: On November 14, 2013, the Obama Administration announced a transitional policy, whereby insurers may, but are not required to, renew existing health plans in the individual and small-group markets in 2014, even if those plans do not meet the market reforms and plan design requirements of the Affordable Care Act.
Under the transitional policy, health insurance coverage in the individual or small group market that is renewed for a policy year starting between January 1, 2014, and October 1, 2014, will not be considered to be out of compliance with the Affordable Care Act's market reforms and plan design requirements, so long as insurers meet certain notice requirements.
The transitional policy only applies to coverage that was in effect on October 1, 2013.
Notice Requirements. To take advantage of the transitional policy, the health insurance issuer must send a notice to all individuals and small businesses that have received a cancellation or termination notice with respect to the coverage, or send a notice to all individuals and small businesses that would otherwise receive a cancellation or termination notice with respect to the coverage, that informs them of the following:
Timing. Where individuals or small businesses have already received a cancellation or termination notice, the issuer must send this notice as soon as reasonably possible. Where individuals or small businesses would otherwise receive a cancellation or termination notice, the issuer must send this notice by the time that it would otherwise send the cancellation or termination notice.
Transition Relief. The Affordable Care Act imposes several market reforms and plan design requirements for small and individual plans. These reforms had been scheduled to go into effect on January 1, 2014.
This transitional policy affects the following market reforms and design requirements. So long as the conditions for transitional relief are met, plans in the individual and small group market will not need to comply with the following if the plan renews effective January 1, 2014 to October 1, 2014:
State Insurance Regulations Continue to Apply. State-based insurance regulations will continue to apply to insurance policies in 2014, even if those state policies require standards similar to the Affordable Care Act's market reforms and design requirements. The Obama Administration has encouraged states to adopt additional guidance and regulations about the minimum required market reforms and plan design requirements at the state level.
Topics: Affordable Care Act, Health Insurance, Health Insurance Exchanges, Healthcare, Healthcare Reform
Published In: Health Updates, Insurance Updates, Labor & Employment Updates
DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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