CurrentAlabama Department of InsurancePolicy 2017-01

Extended Transition to Affordable Care Act-Compliant Policies

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This bulletin governs an extension of transitional relief allowing issuers in the individual and small group markets to renew non-grandfathered policies that may not meet all ACA/PHS Act requirements through policy years starting on or before October 1, 2018, provided those policies end by December 31, 2018; it affects health insurance issuers and plans operating in Alabama.

Policy Summary

PayerAlabama Department of Insurance

PolicyExtended Transition to Affordable Care Act-Compliant Policies

Policy CodePolicy Policy 2017-01

Change TypeExtension of transitional relief

Effective DateImmediate

Next Review DateN/A

Key ActionIssuers renewing coverage under the extended transitional policy must provide the prescribed notice to affected individuals and small businesses and may use early renewals or short policy years to implement the extension.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

Oct 1, 2018latest allowable policy year start

Dec 31, 2018latest allowed policy end date

Individual & Small Groupmarkets eligible

Immediateeffective (bulletin) date

Coverage stance and applicability

Coverage stance for transitional policies

Stance on applicability of market reforms to renewed transitional policies:

Policies renewed under the extended transitional policy will not be considered out of compliance with specified PHS Act provisions for the renewed policy year, provided they meet the extension criteria and end by Dec 31, 2018.

State election options: States may elect to adopt the extension for both individual and small group markets, the individual market only, or the small group market only; States may permit shorter transitional periods but may not extend beyond the CMS-specified limits.

Issuers renewing coverage under the extended transitional policy must provide the prescribed attached notice to affected individuals and small businesses for each policy year renewed under the extension.

Issuers may implement early renewals or short policy years (shorter than 12 months, not longer) to effect the extension; any policies renewed under the transitional policy must end by December 31, 2018.

Transitional policies with rate increases subject to review under PHS Act section 2794 must follow the pre-April 1, 2013 submission rules and the April 1, 2015 updates for filings to States and CMS.

Statutory references and key dates

Referenced statutory provisionsmixed

PHS Act §§2701-2709	Referenced PHS Act sections from which transitional policies may be out of compliance (fair premiums, guaranteed renewability/availability, preexisting conditions, nondiscrimination, essential health benefits, clinical trials).
Section 1312(c) of the Affordable Care Act	Single risk pool requirement; policies subject to transitional relief are not considered out of compliance with this provision.

Policy end date requirement — transitional policies must end by Dec 31, 2018

RequirementAll transitional policies must end by December 31, 2018.

ScopeApplies to health insurance coverage in the individual and small group markets renewed under the extended transitional policy when extension criteria are met.

Issuer obligationIssuers may implement early renewals or short policy years (shorter than 12 months) to effect the extension, but renewed policies may not extend past Dec. 31, 2018.

Issuer obligations and notices

Documentation Required

Provide prescribed notice and offer renewal options when renewing transitional coverage

Issuers renewing coverage under the extended transitional policy must provide the relevant attached notice to each affected individual and small business for each policy year; use Attachment 1 if a cancellation notice has already been sent and Attachment 2 if a cancellation notice has not been sent. Issuers may implement early renewals or short policy years to effect the extension as allowed under the guidance.

Use Attachment 1 when a cancellation notice has already been sent (text begins: “We previously notified you that your current policy is being cancelled…”).
Use Attachment 2 when a cancellation notice has not yet been sent (text begins: “We are writing to inform you that, consistent with federal guidance, you may keep your existing coverage…”).

Defined terms used in this bulletin

Extended transitional policy

DefinitionExtended transitional policy: state-permitted extension allowing issuers to renew non-grandfathered individual or small group policies for policy years starting on or before October 1, 2018, provided those policies end by December 31, 2018.

State optionsStates may elect to adopt the extension for both markets, individual only, or small group only, and may permit shorter transitional periods but not beyond CMS limits.

Operational options for issuersIssuers may use early renewals or shorter-than-12-month policy years to implement the extension (but not extend policy length beyond 12 months).

PHS Act protections (sections 2701–2709) — market reforms referenced

PHS Act sections referencedSections 2701, 2702, 2703, 2704, 2705, 2706, 2707, and 2709 (42 U.S.C. §300gg-8) — market reforms addressed by the transitional relief.

Covered reforms (examples)Fair health insurance premiums; guaranteed availability and renewability; prohibition on preexisting condition exclusions (adults) and other discrimination; nondiscrimination in health care; essential health benefits; clinical trials coverage.

Additional ACA provisionPolicies subject to transitional relief are also not considered out of compliance with ACA section 1312(c) (single risk pool requirement).

Policy Summary

PayerAlabama Department of Insurance

PolicyExtended Transition to Affordable Care Act-Compliant Policies

Policy CodePolicy Policy 2017-01

Change TypeExtension of transitional relief

Effective DateImmediate

Next Review DateN/A

SourceLink

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Extended Transition to Affordable Care Act-Compliant Policies

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Coverage stance and applicability

Coverage stance for transitional policies

Stance on applicability of market reforms to renewed transitional policies:

Transitional policies with rate increases subject to review under PHS Act section 2794 must follow the pre-April 1, 2013 submission rules and the April 1, 2015 updates for filings to States and CMS.

Statutory references and key dates

Referenced statutory provisionsmixed

PHS Act §§2701-2709	Referenced PHS Act sections from which transitional policies may be out of compliance (fair premiums, guaranteed renewability/availability, preexisting conditions, nondiscrimination, essential health benefits, clinical trials).
Section 1312(c) of the Affordable Care Act	Single risk pool requirement; policies subject to transitional relief are not considered out of compliance with this provision.

Policy end date requirement — transitional policies must end by Dec 31, 2018

RequirementAll transitional policies must end by December 31, 2018.

ScopeApplies to health insurance coverage in the individual and small group markets renewed under the extended transitional policy when extension criteria are met.

Issuer obligationIssuers may implement early renewals or short policy years (shorter than 12 months) to effect the extension, but renewed policies may not extend past Dec. 31, 2018.

Issuer obligations and notices

Documentation Required

Provide prescribed notice and offer renewal options when renewing transitional coverage

Use Attachment 1 when a cancellation notice has already been sent (text begins: “We previously notified you that your current policy is being cancelled…”).
Use Attachment 2 when a cancellation notice has not yet been sent (text begins: “We are writing to inform you that, consistent with federal guidance, you may keep your existing coverage…”).

Defined terms used in this bulletin

Extended transitional policy

State optionsStates may elect to adopt the extension for both markets, individual only, or small group only, and may permit shorter transitional periods but not beyond CMS limits.

Operational options for issuersIssuers may use early renewals or shorter-than-12-month policy years to implement the extension (but not extend policy length beyond 12 months).

PHS Act protections (sections 2701–2709) — market reforms referenced

PHS Act sections referencedSections 2701, 2702, 2703, 2704, 2705, 2706, 2707, and 2709 (42 U.S.C. §300gg-8) — market reforms addressed by the transitional relief.

Additional ACA provisionPolicies subject to transitional relief are also not considered out of compliance with ACA section 1312(c) (single risk pool requirement).