The Center for Consumer Information & Insurance Oversight (CCIIO), under the Centers for Medicare& Medicaid Services (CMS), released a notice at the close of February, announcing that insurance companies may extend coverage of certain non-grandfathered individual and group plans that are currently not ACAcompliant for another year. Plans renewed on or before October 1, 2018provided that they end by December 31, 2018.
CCIO will work with issuers and states to implement this policy, including options such as allowing policy years that are shorter but not longer than 12 months or early renewals with a January 1, 2018start date. The intent was to facilitate a smooth transition from transitional coverage to ACA compliant coverage, which requires a calendar year policy year in the individual market.
These plans are ones that were “grandmothered” in from before the Affordable Care Act. As of November 2013, The CCIIO allowed for transitional relief for these noncompliant plans. Now, insurers will not be deemed noncompliant until 2018, though they must specify the deadline for the plan’s termination, which is on or before December 31, 2018. How do “grandmothered” plans differ from “grandfathered” plans? Here’s the breakdown:
Grandfathered Plans
· Plans that are pre-ACA enactment (March 23, 2010) are grandfathered in and exempt from some of the ACA market reforms.
· Do not require transitional relief, as they can exist indefinitely, provided that retain grandfathered status eligibility (primarily restrictions against significant changes to the plan) and comply with certain disclosure and documentation requirements.
· Can lose eligibility for their grandfathered status, depending on changes to the plans.
Grandmothered Plans
Plans that were originally sold post-ACA enactment (March 23, 2010) but before January 1, 2014(before ACA market reforms took effect).
· Transitional relief was provided originally in 2013 and to remain in force until 2014, and extended for another two years in 2014, another year in 2016, and now until 2018.
· Limits to transitional relief vary from state to state or by market (individual or group).
· Have a termination date, currently on or before December 31, 2018.
