Insights

Grandmothered Plans Extended Through 2022


On January 19, 2021, the Department of Insurance issued Bulletin Number 2021-01 to announce a one-year extension of the renewal policy with respect to certain non-grandfathered individual and small group policies known as “grandmothered” policies. The bulletin follows an extension by CMS of the federal non-enforcement policy concerning specific ACA compliance requirements for these grandmothered plans, as reported elsewhere in this edition of Compliance Corner.

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 non-enforcement policy provided relief from certain market reforms, such as the prohibition of coverage exclusions based on pre-existing conditions and non-discrimination based on health status. Under the policy, state authorities could allow health insurance issuers to continue eligible coverage that would otherwise have been cancelled for failure to comply with the ACA requirements.

The department originally announced the state’s intent to allow insurers to continue such coverage via Bulletin 2013-12 issued on November 19, 2013. The transitional policy has been extended by CMS and the department every year since the initial announcement.

Accordingly, small employers who are currently covered by grandmothered policies issued in South Carolina should be aware of the most recent non-enforcement extension. This type of coverage may now be renewed for plan or policy years beginning on or before October 1, 2022, so long as no such coverage extends beyond December 31, 2022. Affected employers should work with their advisors and insurers regarding possible renewal of the coverage.

Bulletin 2021-01 »