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Affordable Care Act (ACA) Transitional Policy Option

Insurers now have the option to renew existing health plans in the individual and small-group markets in 2014, even if those plans do not meet ACA market reforms and plan design requirements. Announced on Nov. 14, 2013, this transitional policy applies to coverage that was in effect on Oct. 1, 2013, as long as the renewal policy year starts between Jan. 1, 2014 and Oct. 1, 2014.

While compliance with the reforms and plan designs will be relaxed under this transitional policy, insurers must still meet certain notice requirements including:

  • A notice to all individuals and small businesses that have received a cancellation or termination notice with respect to the coverage (note: must be sent as soon as reasonably possible);
  • A notice to all individuals and small businesses that would otherwise receive a cancellation or termination notice with respect to the coverage (note: must be sent by the time the cancellation or termination notice would have been sent).

And, the notices must include:

  • Any changes in options;
  • Which market reforms and plan design requirements would not be reflected in any coverage that continues;
  • Their potential right to enroll in a qualified health plan offered through a Health Insurance Marketplace and how to access this coverage;
  • The possibility they might qualify for financial assistance;
  • Their right to enroll in health insurance coverage outside of a Marketplace that complies with the specified market reforms and plan design requirements.

So, whether you have or have not yet received a cancellation or termination notice, be on the lookout for possible changes to your plan due to this new option. 

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