18 May Extension for Non-ACA Compliant Health Plans
Mark your calendar! Extension for Non-ACA Compliant Health Plans approved by the Department of Health and Human Services (HHS) to policy years beginning on or before Oct. 1, 2019.
Impact on Employers
Individuals and small businesses may be able to keep their non‐ACA compliant coverage through 2019, depending on the plan or policy year.
This latest extension may also mean that ACA compliance is never required for these transitional plans. If the ACA is repealed, replaced or amended, the market reforms may no longer apply to these plans.
October 1, 2019 – Certain non‐ACA compliant plans may continue to be renewed for policy years beginning on or before Oct. 1, 2019.
December 31, 2019 – All non-compliant plans renewed under this extended transition policy cannot extend past Dec. 31, 2019.
The Latest Extension
On April 9, 2018, HHS extended this transitional policy for an additional year, to policy years beginning on or before Oct. 1, 2019, provided that all policies end by Dec. 31, 2019. Under the extended transitional policy, health coverage in the individual or small group market that meets certain criteria will not be considered to be out of compliance with the ACA’s market reforms.
Specifically, the extended transition relief policy provides that:
- States may allow issuers that have continually renewed policies under the transitional policy since 2014 to renew that coverage for a policy year starting on or before Oct. 1, 2019; but
- Any policies renewed under this transitional policy must not extend past Dec. 31, 2019.
According to HHS, the additional one‐year extension is intended to smoothly bring all non‐grandfathered coverage in the individual and small group markets into compliance with all applicable ACA requirements.
The extended transition relief only applies with respect to individuals and small businesses with coverage that has been continually renewed since 2014, under the previous transition guidance. It does not apply with respect to individuals and small businesses that obtained new coverage in 2014 or after. All new plans must comply with the full set of ACA reforms.
Also, 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.
Because the insurance market is primarily regulated at the state level, state governors or insurance commissioners have to allow for the transition relief in their state.
A number of states decided against permitting insurers to use the original transition policy, including California, Connecticut, Washington, Minnesota, New York, Vermont and Rhode Island. Some states, such as Maryland, are allowing renewals with specific provisions.
Download our complimentary ACA Compliance Bulletin for a complete overview including impact on small and large businesses along with details implementing the extended transition relief policy.
Have questions about ACA changes? Contact Barrow Group’s employee benefits experts to discuss selecting the right mix of employee benefits for your full-time employees and their dependent children. Click here to contact us or email us at firstname.lastname@example.org today.