Health Care Reform

Small Businesses May Be Able to Keep Existing Health Coverage Through Policy Years Beginning On or Before October 1, 2016

Health Insurance Issuers in Some States May Choose to Continue Certain Coverage That Would Otherwise Be Cancelled

A previously announced transitional policy which allows health insurance issuers, at their option, to continue group coverage that would otherwise be terminated or cancelled has been extended for two years—to policy years beginning on or before October 1, 2016. Businesses affected by the transitional policy may choose to re-enroll in such coverage through October 1, 2016.

Affected Businesses

The extended transitional policy applies to small businesses as well as to businesses that currently purchase insurance in the large group market but that, for policy years beginning on or after January 1, 2016, will be redefined as small businesses purchasing insurance in the small group market. Health insurance issuers that renew coverage under the extended policy are required to provide standard notices to affected businesses for each policy year.

Extended Transitional Policy

At the option of the states, health insurance issuers that have issued or will issue a policy under the transitional policy anytime in 2014 may (but are not required to) renew such policies at any time through October 1, 2016. Policies subject to the transitional relief will not be considered to be out of compliance with some of the law’s key provisions that were originally scheduled to take effect in 2014, including:

  • The requirement to cover a core package of items and services known asessential health benefits;
  • The requirement that any variations in premiums be limited with regard to a particular plan or coverage to age and tobacco use, family size, and geography;
  • The requirements regarding guaranteed availability and renewability of coverage for employers; and
  • The requirements relating to coverage for individuals participating in approved clinical trials.

States may choose to adopt both the previously announced transitional policy as well as the extended transitional policy through October 1, 2016, or adopt one but not the other, in accordance with the agency guidance.States that did not adopt the previously announced transitional policy, and that regulate issuers whose 2013 policies renew anytime between March 5, 2014 and December 31, 2014, including any policies that they allowed to be renewed early in late 2013, may choose to implement the transitional policy for any remaining portion of the 2014 policy year (i.e., this policy could apply to “early renewals” from late 2013).

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