Insights

Transitional Relief Extended for Grandmothered Plans


On June 8, 2022, the Department of Insurance issued Bulletin Number 2022-02 to announce an extension of transitional relief for certain non-grandfathered individual and small group policies known as “grandmothered” policies. The bulletin follows the recent CMS extension of the federal nonenforcement policy concerning specific ACA compliance requirements for these plans.

On November 14, 2013, CMS announced 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 certain market reforms, including prohibitions of coverage exclusions based on pre-existing conditions and requirements to cover essential health benefits and limit annual out-of-pocket spending.

Under the policy, state authorities could permit health insurance issuers to continue coverage that would otherwise have been cancelled for failure to comply with the ACA requirements. The Department of Insurance has historically allowed insurers the option to continue such coverage. Bulletin 2022-02 represents the most recent extension of this policy and applies to renewals for plan or policy years beginning on or after October 1, 2022, and will remain in effect until CMS announces that all such coverage must come into compliance with the specified requirements.

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

Bulletin 2022-02 »