Small Businesses May Be Able to Re-Enroll in Current Coverage

The federal government is encouraging states to adopt a transitional policy which would allow a health insurance issuer, at its option, to continue group coverage that would otherwise be terminated or cancelled. Affected small businesses may choose to re-enroll in such coverage for 2014. Not all states and insurance companies will permit coverage to continue.

Under the transitional policy, small group health insurance that is renewed for a policy year starting between January 1, 2014 and October 1, 2014 will not be considered to be out of compliance with certain key Affordable Care Act market reforms (originally scheduled to take effect for plan years starting on or after January 1, 2014), if certain conditions are satisfied. These market reforms include:

  • The requirement to cover a core package of items and services known as essential health benefits;
  • The requirement that any variations in premiums be limited with regard to a particular plan or coverage to age and tobacco use, family size, and geography;
  • The requirements regarding guaranteed availability and renewability of coverage for employers; and
  • The requirements relating to coverage for individuals participating in approved clinical trials.

Small group plans will still need to comply with the requirement to eliminate preexisting condition exclusions for adults, the revised nondiscrimination rules for wellness programs, and other market reforms not specifically identified in the transitional policy.

To be eligible for transitional relief, the group coverage must have been in effect on October 1, 2013, and the health insurer must send a notice to all small businesses that received a cancellation or termination notice with respect to the coverage (or that would otherwise receive a cancellation or termination notice) that includes certain information regarding other coverage options on and off the Health Insurance Marketplace.

Note: This summary is based on guidance released by the U.S. Department of Health and Human Services on November 14, 2013. The information is subject to change based on new congressional legislation and HR360 will provide additional updates as they unfold.