***SPECIAL EDITION – Individual Plans May Offer Non-ACA Compliant Coverage in ’14!***

Earlier today (11/14/13) the President announced that he will “allow 2014 sales of previously cancelled Individual Health Plans that don’t meet Affordable Care Act (ACA) guidelines”.  Administration officials clarified that the exception would only be available to those who have lost their [individual health] insurance coverage.

The announcement was lacking many of the details that are necessary in order to move forward with this exception.  Among the few details mentioned were that Insurers will…

  • NOT be allowed to offer the non-ACA compliant plans to “…other Americans as it would threaten the ACA’s financial viability”.
  • Be required to notify customers that “alternatives exist” under the ACA, including the availability of tax credits.
  • Have to point out the areas where their plans fall short of government (i.e., ACA) standards.
  • Have to get permission from state insurance commissioners.

The exception, which has no direct impact on group health plans, is a de facto extension of the grandfather clause that was already a provision of the ACA.  Insurers have the choice of whether or not to continue offering the (formerly) non-compliant plans in 2014.  The other challenge would be reaching out to the millions of insureds (like me) that have already received notice of the cancellation of their current plan, and the automatic conversion to an ACA compliant plan.  With only 6 weeks left until the new year, and the various considerations involved in taking advantage of this relaxation of the rules (i.e., cost, technology, impact on rates, etc.), there might not be very many takers on the insurance company side.

I just received an email from the largest issuer of Individual Health Insurance coverage in the state of Nebraska – Blue Cross Blue Shield of Nebraska – which read in part – “…leaders are analyzing the impact of the President’s proposal, and will give further information soon about how we will proceed”.

Once again I want to stress that although this announcement does not directly affect or pertain to the Group Health Insurance market; to the extent that a significant number of individual health insurers decide to “un-do and/or re-do” policies could impact open enrollment.  In other words, if fewer individuals are forced to accept higher premiums and/or reduced coverage (like me) associated with some of the 2014 renewal offers, there will be fewer “group insurance eligible” individuals wanting to enroll in employer coverage during open enrollment.

Stay tuned!