Extended Transition to ACA Compliant Policies

On February 23, 2017, the Centers for Medicare and Medicaid Services (CMS) released an insurance standards bulletin allowing states to yet again extend the life of "grandmothered" or transitional health insurance policies to policy years beginning on or before October 1, 2018, as long as the policies do not extend beyond December 31, 2018. 

This bulletin is essentially identical to the bulletins issued the past several years which permit certain non-ACA compliant health plans to remain in effect.

Background

On November 14, 2013, President Obama announced that states could allow insurers to extend non-compliant coverage for policy years beginning before October 1, 2014 and they would be free from the ACA reforms. Then, in March of 2014, the Obama administration prolonged the life of these "transitional" plans to coverage renewed by October 1, 2016.   These plans are now permitted to remain in effect even longer.

What does this mean for employers?

This means business as usual for those employers who still maintain these type of plans. President Trump has committed to "smoothly bringing all non-grandfathered coverage in the individual and small group market into compliance with all applicable" ACA requirements so this essentially buys everyone more time to sort through everything.