On November 14, 2013, under increasing political pressure, President Obama announced that the Administration temporarily will allow insurers to renew some individual and small employer policies for 2014—even if these plans do not meet certain Affordable Care Act requirements, such as Essential Health Benefits. The new rules permit insurers, until October 1, 2014, to renew non-ACA-compliant individual and small-group policies. But insurers may exercise this option only to the extent that state regulators and state insurance law allows them to do so. Those insurers who allow renewal of non-ACA-compliant plans must inform enrollees about two points: first, insurers must identify which ACA protections are absent from the renewed plan; and second, insurers must provide information about their other options, including the availability of more expansive options on or off the marketplace and the availability of potential subsidies and Medicaid eligibility.
CMS released a letter to insurance commissioners explaining the policy in tandem with the President’s announcement. State insurance regulators already have spoken out, showing differing viewpoints as to whether they will allow the renewals. Some regulators from California, Ohio, and Texas have indicated a willingness for insurers to renew their plans if they choose to do so. Maryland, Minnesota, and New York regulators issued statements that they were currently reviewing the President’s proposal. And Oregon’s and Washington’s insurance commissioners announced that they would not allow insurers to renew their non-ACA-compliant individual and small-group policies.
The CMS letter to the insurance commissioners is available here. An article discussing statements of insurance commissioners in California, Washington, and Oregon is available here. Another article including statements from other regulators and insurers may be found here. We will continue to monitor this developing situation. For a more in-depth analysis of this guidance, please review the client alert available here.