Breaking News President Announces Cancelled Policies Fix

Breaking News President Announces Cancelled Policies Fix

Obama Policy Fix





 Breaking News President Announces Cancelled Policies Fix

Yesterday, the President announced  that people with health care coverage that is not Affordable Care Act (ACA)-compliant may be able to keep their plans in 2014. Effectively “Grandfathering” of plans purchased after the original law has passed in 2010   There has been a great deal of concern being reported in the national media around the prospect of  millions of people losing their health insurance coverage effective January 1, 2014 because of the Patient Protection and Affordable Care Act (“PPACA” aka “ObamaCare”).

We are awaiting how specifically your State’s Insurance Commissioner will react to this. Questions remain about how this new policy will work, including how insurance commissioners will react, whether insurance companies will choose to continue these policies, what the rates for the policies will be, and whether this grandfathering will extend past 2014.

To be clear, what’s being reported principally has to do with the individual health insurance market in the US which insures approximately 15 million people, or about 5% of the country’s population.  Within that segment of the privately insured market, a large percentage, certainly more than half, of individual policies are not considered to be “grandfathered” under the law’s requirements for such status.  As a result, to be in compliance with the law’s new mandates and coverage requirements, virtually all “non-grandfathered” policies are scheduled to be terminated January 1st, and it will be up to individuals to replace their existing coverage with new compliant policies after this date.

These recent developments have resulted in

1) President Obama issuing an apology to affected individuals on November 7th.

2) the President’s announcement earlier yesterday during a hastily called press conference at the White House that pursuant to an Executive Order, Americans may keep individual health insurance policies they were told will be canceled because these policies failed to meet requirements established by the new law.

President Obama has left it up to the states to independently determine how they will go about implementing this change which is being characterized as an “administrative fix”.  However, since the insurance business is state-regulated, each state will need to determine whether or not they will implement this change, and if they choose to implement it, they will have control over defining some of the specific parameters.  Insurance companies will also need to quickly make decisions on how to accommodate this new provision if the change is adapted in a state in which they operate.

Please be sure to reference “Talking Points: PPACA’s employer and individual mandates“, a document that’s intended to give you some current context / perspective and relevant information around these particular subjects.

In closing, if you should have any further questions or comments about the above or the attached, please let us know.We will continue to monitor this issue and all ACA implementation in an effort to keep you informed of new developments. In the meantime, please visit our to view past blogs and Legislative Alerts. 

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New Summary of Benefits Coverage Notice

New Summary of Benefits Coverage Notice

New Summary of Benefits Coverage Notice Summary of Benefits Coverage SampleSummary of Benefits Coverage Sample Reminder: New SBC Notice Requirements Take Effect Soon  

After a six-month delay in the original effective date, group health plans (including grandfathered plans) will soon need to comply with a new requirement under Health Care Reform to provide a summary of benefits and coverage (SBC) so that employees can more easily compare insurance options.

The new SBC notice requirements are effective for plan years and open enrollment periods beginning on or after Sept. 23, 2012. If you need a refresher, the following are some key points for group health plans:

  • An SBC must be provided to plan enrollees at specific times, such as upon application for coverage and at renewal, as well as upon request.
  • Insured group health plans can satisfy the requirement if the issuer provides a timely and complete SBC to the participant or beneficiary.
  • Combining information for different coverage tiers, different cost-sharing selections (such as levels of deductibles and copayments), and different add-ons to major medical coverage (such as FSAs, HRAs, HSAs, or wellness programs) into one SBC is permissible, provided the appearance is understandable.
  • SBCs may be provided either as a stand-alone document or in combination with other summary materials (for example, an SPD), if the SBC information is intact and prominently displayed at the beginning of the materials and in accordance with the SBC timing requirements.
  • The SBC must comply with certain appearance and format requirements and must use terminology understandable by the average plan enrollee; an SBC template along with instructions and related materials that may be used to satisfy the notice requirements, is available online.

The U.S. Department of Labor has released three sets of Frequently Asked Questions (FAQs) which address a number of issues relating to the SBC notice requirements. The FAQs also make clear that, during the first year of applicability of the new SBC rules, penalties will not be imposed on plans that are working diligently and in good faith to provide the required content in an appearance that is consistent with the final regulations.

Summary of Benefits Coverage Sample

New Summary of Benefits Coverage Notice