Kilpatrick

Industry News

CMS Extends Small Group Transitional Relief Policies through 2019

On Apr 9, 2018, CMS issued a new one year extension of its transitional policy for non-grandfathered plans that are not compliant with the ACA.

Policyholders will be allowed to renew their transitional plan coverage through Oct 1, 2019 as long as the coverage does not extend beyond Dec 31, 2019. Assuming CMS does not issue another extension next year, all non-compliant policies must become compliant by Jan 1, 2020. Any policy renewed during the 2018 calendar year after Jan 1 must have a short plan year in order to terminate by Dec 31. CMS believes that requiring the transitional policies terminate immediately before Jan 1, 2020 will “facilitate smooth transitions from transitional coverage to Affordable Care Act-compliant coverage, which requires a calendar year policy year in the individual market.”

As specified in prior extensions, carriers that renew coverage under the extended transitional relief policy must provide a notice to affected individuals and small businesses about the limitations of non-compliant coverage for each policy year.

We expect TDI to allow the extension in Texas as outlined by CMS. Carriers will have discretion to allow policyholders to change their anniversary dates or obtain short plan years within the CMS guidelines.

CMS released this extension much later than the three prior extensions. The late timing of this extension and its duplication of the prior extensions’ framework may indicate that it may be the last.

Background

In response to public pressure, CMS first announced transitional relief for small groups and individuals allowing them renew the coverage they had in place on Oct 1, 2013 even though that coverage did not comply with various ACA market reforms including community rating, essential health benefits, and metallic benefit levels. The most recent announcement is the fourth extension of the transitional relief policy and the second under the Trump administration. Timeline of related guidance:

  • Nov 14, 2013 – The original transitional policy. Available to policy years beginning Jan 1 – Oct 1, 2014. All non-compliant policies would terminate by Sep 30, 2015.
  • Mar 5, 2014 – Extension 1. Available to policy years beginning Jan 1, 2014 – Oct 1, 2016. All non-compliant policies would terminate by Sep 30, 2017.
  • Feb 29, 2016 – Extension 2. Available to policy years beginning Jan 1, 2014 – Oct 1, 2017. All non-compliant policies must terminate by Dec 31, 2017.
  • Feb 23, 2017 – Extension 3. Available to policy years beginning Jan 1, 2014 – Oct 1, 2018. All non-compliant policies must terminate by Dec 31, 2018.
  • Apr 9, 2018 – Extension 4. Available to policy years beginning Jan 1, 2014 – Oct 1, 2019. All non-compliant policies must terminate by Dec 31, 2019.
This entry was posted in Industry News and tagged , , , , , , , , , , , . Bookmark the permalink. Follow any comments here with the RSS feed for this post. Both comments and trackbacks are currently closed.