Health Reform Update:
Under guaranteed renewability requirements that date back to the Health Insurance Portability and Accountability Act of the 1990s, health insurers have had to give covered employers and individuals at least 90 days notice before discontinuing an insurance product. The 90-day notice requirement gave enrollees time to make other arrangements when their coverage was being discontinued.
Individual coverage is now provided on a calendar year basis. Open enrollment for 2016 does not begin until November 1, 2015. Coverage alternatives should be readily available in most markets as of that date. Moreover, it would be difficult for insurers to give enrollees notice 90 days before December 31, 2015 when coverage ended (that is, by October 3, 2015) because, given the time frame for plan certification for 2016, replacement plans may not be finally approved by that date.
And enrollees may be confused if they receive notices of plan discontinuance before replacement plans are approved. The 90-day notice requirement does not, therefore, make sense for marketplace plans.
For these reasons, the Centers for Medicare and Medicaid Services (CMS) decided in 2014 to waive enforcement of the 90-day notice requirement for 2015. On July 7, 2015, CMS announced that it will again waive enforcement of the 90-day requirement for non-grandfathered, non-transitional for 2016 coverage.
Insurers are only required to provide a notice of discontinuance for these plans before the first day of open enrollment, that is before November 1, 2015. Insurers intending to discontinue transitional or grandfathered plans must give 60-days notice.
The 90-day discontinuance notice requirement continues to apply to group plans, which have continuous open enrollment. Insurers that intend to completely withdraw from a market must continue to give 180 days notice (and may not return to the market for 5 years).
The July 7 guidance further provides that insurers should continue to use standard notices for product discontinuances and renewals provided in earlier guidances.
Read the full report here.
Contact Steven G. Cosby, MHSA, Group Health Insurance Broker and Agent with Cosby Insurance Group, with questions or to request more information and to schedule a healthcare plan evaluation, savings analysis or group plan solution for your company.
