On Feb. 29, 2016, the Department of Health and Human Services (HHS) extended an existing transition policy for certain health plans that do not comply with the Affordable Care Act (ACA) for an additional year, to policy years beginning on or before Oct. 1, 2017.
In states that allow it, this transition policy gives health insurance issuers the option of renewing current policies for current enrollees without adopting all of the ACA’s market reforms that took effect in 2014. Originally announced on Nov. 14, 2013, the transition policy was intended to apply in 2014 only. However, it was previously extended for two years, to policy years beginning on or before Oct. 1, 2016.
As a result of this most recent extension, individuals and small businesses may be able to keep their non-ACA compliant coverage into 2018, depending on the plan or policy year.
According to HHS, the additional one-year extension is intended to smoothly bring all non-grandfathered coverage in the individual and small group markets into compliance with all applicable ACA requirements no later than 2018.
The extended transition relief only applies with respect to individuals and small businesses with coverage that has been continually renewed since 2014, under the previous transition guidance. It does not apply with respect to individuals and small businesses that obtained new coverage in 2014 or after. All new plans must comply with the full set of ACA reforms