November 07, 2016
On July 18, 2016, Wisconsin Insurance Deputy Commissioner J.P. Wieske provided additional information regarding non-grandfathered small group transitional policies. The Wisconsin Insurance Commissioner Nickel had previously announced that insurers in the state are permitted to renew such plans with policy years beginning on or before Oct. 1, 2016. This is related to the March 5, 2014, CMS announcement of a two-year extension to the transitional policy for non-PPACA-compliant health benefit plans. The plans must have existed before Oct. 1, 2013, and are not required to be in compliance with certain PPACA mandates including community rating, coverage of essential health benefits, prohibition on pre-existing condition exclusions and the annual out-of-pocket maximum limit.
In the new bulletin, Deputy Commissioner Wieske clarifies that the plans may be extended through Dec. 31, 2017, even if that results in a policy year greater than 12 months.
Small employers that renew a policy with an insurer for a period greater than 12 months should be aware of how that decision impacts some of the employer’s compliance obligations. Specifically, if the plan is contributory and the employees contribute on a pre-tax basis, Section 125 requires that employees have an opportunity at least once per year to change their elections. Thus, even if the rates and policy are in place for greater than 12 months with the insurer, the employer would still be required to have an open enrollment period after 12 months.