Wednesday, November 27, 2013

Guidance Clarifying May 2 Commissioner's Memo as it Relates to President Obama’s Executive Order

On November 14, 2013, President Obama made an announcement allowing Insurance Commissioners the flexibility to extend non-grandfathered health insurance policies through October 2015.  This order is in response to the health insurance cancellations occurring throughout the nation.  On May 2, 2013 the Iowa Insurance Division requested health insurance carriers doing business in the state to provide a transition plan for all non-grandfathered, non-ACA compliant policies.   At that time, the Division requested that carriers inform the Division if they planned to:

(1) Amend the non-ACA compliant health plans,

(2) Terminate the non-ACA compliant health plans or  

(3) Utilize another method and provide a description of the proposed alternate method.

Most carriers in Iowa pursued an alternate method by offering current members a shortened-plan year to transition to ACA compliant policies at year end in 2014.  This option provided Iowans the flexibility to renew a current individual or small employer group insurance policy in December 2013 and keep that policy until December 2014.  

Generally, the President’s announcement does not have a large impact on the Iowa marketplace. IID is not altering the policy outlined in the May memo.  IID does not interpret the announcement to permit the sale of non-ACA compliant policies to either new individual or new small employer groups on or after January 1, 2014.   The vast majority of Iowans were provided the opportunity to shorten their plan year in the individual market earlier this year.  To the extent a carrier is deviating from the transition plan that was filed with the Division in June, the carrier must contact the Division immediately.