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From: Randy Pate, Director, Center for Consumer Information and Insurance Oversight
Title: Insurance Standards Bulletin Series – INFORMATION – Extension of Limited Non-Enforcement Policy through 2020
Subject: Extended Non-Enforcement of Affordable Care Act-Compliance With Respect to Certain Policies
This bulletin extends the Centers for Medicare & Medicaid Services’ policy under which CMS will not take enforcement action against certain non-grandfathered health insurance coverage in the individual and small group market that is out of compliance with certain specified market reforms. The extended non-enforcement policy1 in this bulletin applies for policy years beginning on or before October 1, 2020, provided that all such coverage comes into compliance with the specified requirements by January 1, 2021.
On November 14, 2013, CMS issued a letter to the State Insurance Commissioners outlining a transitional policy for certain non-grandfathered coverage in the small group and individual health insurance markets.2 CMS announced in its November 14, 2013 letter that, if allowed by applicable State authorities, health insurance issuers would be able to choose to continue certain coverage that could not otherwise remain in place without significant changes to comply with Affordable Care Act requirements, and individuals and small businesses with such coverage could, as a result, choose to re-enroll in such coverage.
CMS further stated that, under the non-enforcement policy, non-grandfathered health insurance coverage in the individual or small group market that is renewed for a policy year starting between January 1, 2014 and October 1, 2014 would not be treated as being out of compliance with certain market reforms set forth below if certain specific conditions are met.
CMS has continuously extended this non-enforcement policy, with the most recent extension in effect until policy years beginning on or before October 1, 2019, provided that all such coverage comes into compliance by January 1, 2020.3
As provided in previously issued guidance, health insurance coverage subject to the non-enforcement policy is not treated as out of compliance with the following provisions of the Public Health Service Act:
Additionally, health insurance coverage subject to the non-enforcement policy is not treated as out of compliance with section 1312(c) of the Affordable Care Act (relating to the single risk pool requirement). As a reminder, issuers can choose to comply with some or all of these provisions in their renewed policies.
CMS is committed to bringing all non-grandfathered coverage in the individual and small group markets into compliance with all applicable Affordable Care Act requirements. However, we are extending our non-enforcement policy to policy years beginning on or before October 1, 2020, provided that all such coverage comes into compliance with these requirements by January 1, 2021.
Specifically, States may allow issuers that have renewed coverage under the non-enforcement policy continually since 20145 to renew such coverage for a policy year starting on or before October 1, 2020; however, any coverage renewed under this non-enforcement policy must come into compliance with the relevant requirements by January 1, 2021.
We will work with issuers and States to implement this policy, including options such as allowing policy years that are shorter (but not longer) than 12 months or early renewals with a January 1, 2020 coverage start date. This approach will facilitate changing from non-compliant coverage to Affordable Care Act-compliant coverage, which requires a calendar year policy year in the individual market.
States can elect to extend the non-enforcement policy for shorter periods than outlined above but may not extend it beyond these periods.6 States may also apply the non-enforcement policy to fewer market reform provisions than outlined above but may not extend it to additional provisions.
Furthermore, States may choose to adopt the extended non-enforcement policy in the following manner:
Under the extended non-enforcement policy, health insurance coverage in the individual or small group market that meets the criteria of the extended policy and associated group health plans of small businesses, as applicable, will not be treated as out of compliance with the market reforms as specified above.
Health insurance issuers that renew coverage under this extended non-enforcement policy, must, for each policy year, provide the relevant attached notice to affected individuals and small businesses as specified in our previously issued guidance.7
All health insurance coverage subject to this non-enforcement policy that has rate increases subject to review under PHS Act section 2794 should use the rules and processes for submission to States and CMS that were updated April 9, 2018,8 to ensure compliance with PHS Act section 2794 requirements.
IV.Where to get more information
If you have any questions regarding this guidance, please e-mail CCIIO at email@example.com.
1 While this bulletin refers to a "non-enforcement policy" and previous bulletins referred to a "transitional policy," the substance of the policy remains unchanged.
2 CMS "Letter to State Insurance Commissioners" (Nov. 14, 2013), available at https://www.cms.gov/cciio/resources/letters/down loads/commissioner-letter-11-14-2013.pdf
3 CMS "Insurance Standards Bulletin Series – Extension of Transitional Policy through October 1, 2016" (Mar. 5, 2014), available at:
4 We note that sections 702 of the Employee Retirement Income Security Act and 9802 of the Internal Revenue Code remain applicable to group health plan coverage.
5 For purposes of determining whether coverage has been renewed continually, see the definition of when a product will be considered the same "product" under 45 CFR 144.103.
6 Following enactment of the Protecting Affordable Coverage for Employees Act (Pub. L. 114-60), the non-enforcement policy in the March 5, 2014 guidance for certain eligible large employers no longer applies. However, States that elect to expand the definition of small employer to 1-100 employees may, under State law authority, choose to provide transition relief to these employers, as appropriate.
7 Because these are required standard notices that cannot be modified, the Paperwork Reduction Act does not apply to these notices.
8 See CMS "Rate Review Justification Instructions for Transitional Policies" (April 9, 2018), available at https://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/index.html.