Affordable Care Act (ACA) Update – as of 11/20/13

Transition Policy

Recently President Barack Obama broadcast an executive decision to the American people stating that if they wanted to maintain their current healthcare plan, they could do so for an additional year. This was done in response to many concerns raised by individuals and groups who had received notification that their current plan would be discontinued as it was not complaint with the ACA requirements.

The Department of Health and Human Services (HHS), which is tasked with administering the new healthcare law, issued a letter to state insurance commissioners. In the letter it details the “transitional policy” that the federal government is offering. It is critical to note that this new guidance by the President is an option, not a requirement. All states and their insurance commissioners, along with the insurance providers have to make that strategic decision to continue current plans.

Details of the new policy:

-Issuers would be permitted, but not required, to extend individual market and small group market policies that were in effect on October 1, 2013 without amending the policies to meet all ACA standards. The transition policy cannot apply to individuals or small businesses that obtain new coverage after October 1, 2013.

-This transition policy does not impact those who are uninsured or have Medicare, Medicaid or large employer coverage.
 
-The transition policy would apply to renewals of existing business occurring from January 1, 2014 until October 1, 2014. HHS indicated that it will re-evaluate this policy in 2014 and could extend it to additional renewal months.

– If issuers choose to use this transition policy to extend existing coverage, they must provide notification to enrollees in the extended coverage that includes the following:

1. Any changes in the options available to them which of the specified ACA market reforms would not be reflected in any coverage that continues their potential right to enroll in a qualified health plan offered through a Health Insurance Marketplace and possibly qualify for financial assistance

2. how to access such coverage through a Marketplace;

3. and their right to enroll in health insurance coverage outside of a Marketplace that complies with the specified market reforms.

-Policies that are extended using this transition relief are not technically grandfathered. The HHS guidance indicates that they will not be expected to comply with certain ACA market reforms, including:

• The requirement to limit premium variations to age, tobacco use and geography
• Essential health benefits (EHB)
• Actuarial value metal levels
• Restrictions on cost sharing
• Guaranteed availability of coverage
• Guaranteed renewability of coverage
• Non-discrimination against a provider operating within their scope of practice
• Non-discrimination in coverage for individuals participating in approved clinical trials
• Prohibition of pre-existing condition exclusions or waiting periods for adults (exclusion would not apply to small group)
• Prohibition on health status discrimination (exclusion would not apply to small group)

As this new policy continues to unfold MBPA will keep you up to date as to what your options are in planning for you and your employee’s healthcare options. If you have any questions please contact our Government Relations Team at bbochniak@michbusiness.org or by phone at : (586) 393-8800.