Non Compliant ACA Policies Allowed for Additional Year

Feb 27, 2017

Consumers and insurers may temporarily keep for another year coverage that does not meet the minimum standards required by the Affordable Care Act, the US Department of Health and Human Services’ Center for Consumer Information and Insurance Oversight announced Thursday.

These small group and individual health insurance policies were previously being cancelled because they do not meet the minimum standards required by the ACA, but the federal guidance has been updated to allow this coverage for the upcoming policy year.

“We are committed to smoothly bringing all nongrandfathered coverage in the individual and small group markets into compliance with all applicable Public Health Service Act sections, including those relating to single risk pools,” wrote Jeff Wu, acting director, Center for Consumer Information and Insurance Oversight. “Therefore, we will extend our transitional policy to policy years beginning on or before Oct., 1, 2018, provided that all such policies end by Dec. 31, 2018.”

Modern Healthcare reports the insurance industry lobbied for the grandmothering extension, but some experts say it will hurt efforts to stabilize the individual market and moderate rate hikes by letting healthier people stay in plans outside the ACA-regulated insurance pool.

Insurers that sell less comprehensive coverage are likely to be “jumping for joy,” Amy Gordon, a partner at the law firm McDermott Will & Emery, told FierceHealthcare. However, “those insurers that are writing only the ACA-compliant insurance are not going to be as happy,” she said. “I think they’re going to be angry that they’re going to lose some possible good risk to those mini-med or noncompliant policies."

 

Source: Staffing Industry Analysts

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