White House Extends Transition Policy for Canceled Health Plans
Millions of Americans received notices in late 2013 informing them that their health insurance plans were being canceled because they did not comply with the ACA’s reforms. President Obama was criticized that these cancelations went against his assurances that if consumers had a plan that they liked, they could keep it.
Responding to pressure from consumers and Congress, on Nov. 14, 2013, President Obama announced a transition relief policy for 2014 for non-grandfathered health insurance coverage in the small group and individual health insurance markets.
On March 5, 2014, the Obama Administration announced a two- year extension to the transition policy for individual and small group health plans that do not comply with the ACA’s market reforms.
- On Nov. 14, 2013, the White House announced a transition policy for 2014 that allows issuers to continue policies that don’t meet ACA standards.
- This transition policy has been extended to policy years beginning on or before Oct. 1, 2016.
- Individuals and small businesses may be able to keep their non-ACA compliant coverage into 2017, depending on the policy year.
- States have the option to extend the transition relief to certain large employers in 2016.
HHS outlined the original transition relief policy in a letter to state insurance commissioners. Under the original transitional policy, health insurance coverage in the individual or small group market that is renewed for a policy year starting between Jan. 1, 2014, and Oct. 1, 2014 (and associated group health plans of small businesses), will not be considered to be out of compliance with specified ACA reforms.
Also, to qualify for the transition relief, issuers must send a notice to all individuals and small businesses that received a cancelation or termination notice with respect to the coverage (or to all individuals and small businesses that would otherwise receive a cancelation or termination notice with respect to the coverage).