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CMS Extends “Grandmothered Plans” Nonenforcement Policy Allowing Certain ACA Noncompliant Health Policies



Insurance Standards Bulletin Series–Information–Extension of Limited Non-Enforcement Policy through 2020 (Mar. 25, 2019)

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CMS has announced another extension of the limited nonenforcement policy allowing states to permit insurers in the individual and small group markets to renew health insurance policies they would otherwise have to cancel due to noncompliance with certain insurance market reforms under the Affordable Care Act (ACA). CMS generally continues the terms and conditions applicable to last year’s extension of this transitional policy first announced in 2013 (see our Checkpoint article).

Under this latest guidance, states may permit insurers that have continually renewed eligible non-grandfathered individual and small group policies since January 1, 2014, to again renew that coverage for a policy year beginning on or before October 1, 2020, provided that the policies end by January 1, 2021. Health insurers relying on this nonenforcement policy must send an informational notice—the content of which has not changed from last year—to affected individuals and employers.

EBIA Comment: The individual and small group market plans under this transitional policy are sometimes referred to as “grandmothered plans.” Grandmothered plans are distinct under the ACA from “grandfathered plans,” which are plans that were in existence on March 23, 2010, and have not undergone certain prohibited changes (see our Checkpoint Question of the Week). While both types of plans are exempt from many ACA requirements, it’s important to accurately determine which exemption applies to identify the applicable provisions. Grandfathered plans were the subject of a recent agency request for information gathering input to better understand the challenges for plans and insurers in avoiding loss of grandfathered status (see our Checkpoint article). For more information, see EBIA’s Health Care Reform manual at Sections VI.B (“What Is the Significance of Grandfathered Plan Status?”) and XIV.A (“Introduction and Understanding Small and Large Group Markets”).



Contributing Editors: EBIA Staff.

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