CMS Says Obama Fix Applies to Small Group and Individual Policies

The Centers for Medicare and Medicaid Services (CMS) announced late on November 14, 2013, that small group health insurance policies, as well as individual health insurance policies, that are currently in place can remain in effect for one year without having to comply with the Patient Protection and Affordable Care Act (Affordable Care Act) marketplace rules that start in 2014. The CMS announcement followed the President’s press conference that same day, announcing the fix.

CMS issued a letter to state insurance commissioners informing the commissioners that the “transition policy” applies to both small group and individual policies that have changed since the law took effect, as well as to policies that individuals and small groups purchased after the law was enacted. The definition of a “small group” varies from state to state, but generally does not exceed 100 employees.

Under the transition policy, state insurance commissioners have the final say and can override the extension. Additionally, insurers are not required to extend these policies. Insurers that extend the policies must let consumers know to what extent their policies do not comply with requirements of the Affordable Care Act and inform them of additional options and tax credits available through the Exchanges.

The CMS letter to state insurance commissioners is available at here.