Insights

Transitional Relief Extended for Grandmothered Plans


On June 15, 2020, Insurance Commissioner Ridling issued Bulletin Number 2020-14 to announce a one-year extension of transitional relief for certain nongrandfathered individual and small group policies known as “grandmothered” policies. The bulletin follows the CMS extension of the federal nonenforcement policy with respect to specific ACA compliance requirements for these plans through December 31, 2021.

As background, on November 14, 2013, CMS issued a letter outlining a transitional policy with respect to the healthcare reform mandates for coverage in the individual and small group markets. This nonenforcement policy provided relief from specific market reforms, including requirements to cover essential health benefits and limit annual out-of-pocket spending and prohibitions of coverage exclusions based on pre-existing conditions.  

Under the policy, state authorities could choose to allow health insurance issuers to continue coverage that would otherwise have been cancelled for failure to comply with the ACA requirements. The commissioner had previously announced the state’s intent to allow insurers the option to continue such coverage. Bulletin 2020-14 represents the most recent extension of this policy.

Accordingly, small employers who are currently covered by such grandmothered policies issued in Alabama should be aware of the bulletin. These employers should work with their advisors and insurers regarding possible renewal of the coverage.

Bulletin Number 2020-14 »