The announcement that insurance carriers can offer one-year renewals for plans that were cancelled for not being compliant with the Affordable Care Act will have no effect on large employers, most of whom are currently in the middle of open enrollment. Small group plans, however, could be affected.
“Large employers aren’t affected by this but small employers possibly could be,” says Drew Crouch, head of government relations at Buck Consultants. “State insurance commissioners may look at this and say ‘we’re not going to do this’ and the insurance issuers themselves may decide not to do it.”
Lenny Sanicola, practice leader with WorldatWork, agrees. “From an employer perspective, I don’t see any direct impact,” he says. “My advice to employers is always: ‘There’s noise out there. Don’t get distracted. Continue to focus on the employer shared responsibility provision and your overall long-term health care strategy.’”
For small group plans that may have received cancellation notices, Crouch suggests they can contact their brokers, but will largely have to take a wait-and-see approach.
“First the state insurance commission or whatever state regulator is going to have to decide whether they’re going to implement this policy, and then they have to see if the insurance companies themselves are going to do it,” he says. “If they want to they can reach out to their broker now, but I think it’s going to take some time.”
Crouch notes the CMS’s letter to state insurance commissioners doesn’t clarify what definition of “small employer” the government is using. “It’s probably going to be either under 100 employees or under 50 employees [but] that’s a little grey in the letter,” he says.
Jean Hemphill, leader of the health care practice group with Ballard Spahr, says transitional relief announced in the President's remarks, and in the letter to state insurance commissioners sent by CMS, address the individual and small-employer insurance market only.
The relief allows insurance carriers to renew existing policies that do not meet certain market reforms that were to take effect as of Jan. 1, 2014, such as coverage for essential health benefits and the pre-existing condition exclusion.
For large employers, even small employer plans, it’s pretty late in the game for 2014, says Hemphill. “Most employers are in the middle of open enrollment right now, they’ve signed up their plans for 2014,” she says. “Most employers we’re working with are anxiously awaiting employer-responsibility refinements so they can start planning for 2015.”
The announcement “will not affect large employers that had to switch their insured plans for 2014, such as those that offered mini-med plans to certain workers,” Amy Bergner, managing director in the health care practice at PricewaterhouseCoopers Human Resource Services, told EBN.
But it “could result in small employers being able to continue offering mini-med or other insured policies that they thought would no longer be available — if their insurance companies are willing and able to make this possible. At this late stage, it’s unclear how this development will unfold, as many insurers had already re-tooled for the 2014 changes.”
And while Sanicola advises employers to tune out the ACA noise, he also believes there could be further extensions or changes to the implementation of the law. “I think we’re going to see issues come to the table, and there obviously will be the political side and the rhetoric, but we may see other developments — extensions or changes. So don’t be surprised or distracted. … I get the feeling this isn’t the end.”
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