Keeping Your Current Health Plan Under the Transitional “Fix” to the Affordable Care Act

President Obama made a ‘game-changing’ announcement yesterday to the implementation of the health care law that ALL of our small group and individual medical clients need to be aware of, when he stated that Americans MAY keep their current health plan vs. being forced into new Affordable Care Act (ACA) compliant plans in 2014.
This announcement intends to provide a one-year only transitional period to small groups and individuals who were not going to be able to renew their current medical plans in 2014, as all plans had been cancelled and replaced by ACA compliant ones (so as to include ‘Essential Health Benefits’ such as pediatric dental and vision, be mapped to ACA defined metallic actuarial tiers–Platinum, Gold, Silver, Bronze, and include rating changes per insured/dependent per age, location, and tobacco in some states) as required by the law. As groups and individuals started receiving notifications from insurers stating they could not keep their current health plan, despite the promise they could when the President rolled out the health care law, the push for this type of late change–be it possibly too late–came to the forefront.
To clarify, none of the small group medical policyholders in NJ, PA or NY were going to be allowed to keep their current plans as all were developed prior to the ACA regulations above which go in effect on January 1st; insurers had to launch replacement, compliant plans–and rates to go alongside them (again, per per insured/dependent by age and location, per child up to 3 children under the age of 21, and per child over age 21, with tobacco use factored in to rates in certain states) since rates in the Health Insurance Marketplace must match those outside, to follow the law. The plan changes and ratings that had been rolled out so far showed higher out-of-pocket maximums, meaning higher exposure for insureds, higher rates due to pediatric dental and vision premiums and/or due to age/location rating vs blended group rating, less plan choice flexibility as insurers reduced plan portfolios to manage changes and some insurers opted out of Marketplace participation, and administrative challenges due to rates varying per person within a group.
With this new information, we now have to wait on the state governors and insurance commissioners for response, as the insurers cannot make any decisions until guided at the state level.
It is likely states could decide to move forward and not change what has already been put into motion to comply with this late amendment, as states like California, Idaho, Kentucky, Virginia and Washington have already announced.
As such, at this time, we urge all policyholders with January renewal dates who wish to keep their current health plans not to make any decisions on electing new ACA compliant plans for January 1st, as we want to be sure to provide the rates, information, and details on whether or not you can keep existing plans before making any plan decisions for the coming year.
If you have already made a request to ‘early renew’ your plan as of December 1, 2013, we will communicate as soon as we have information as to how such requests will be handled in consideration of yesterday’s news.
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