Small Group Transitional Period Extended

04/25/2014

Health and Human Services has announced a one year extension of the three year transition period provided to small group (under 50 employees) market issuers in MA. The announcement came in response to a letter from Governor Patrick requesting a permanent waiver for the Commonwealth from certain market rating requirements under the Affordable Care Act.

Earlier this month HHS provided a broader transitional enforcement policy for non-grandfathered coverage in the small group and individual insurance market to allow issuers to continue certain coverage that would otherwise be terminated or cancelled for not complying with ACA regulations. In light of this announcement, HHS has provided a broader transition period for the elimination of small group market rating factors permitted under MA law (i.e. group size, industry, participation rate, and intermediary and small group purchasing cooperative factors). Small group market issuers will have until 2017, instead of 2016 as previously stated, to come into full compliance with the new rating rules. The following schedule will apply;

  • For policy years beginning on or after January 1, 2014, but before January 1, 2015, small group market issuers may use 2/3 of the disallowed factors;
  • For policy years beginning on or after January 1, 2015, but before January 1, 2016, small group market issuers may use 2/3 of the disallowed factors;
  • For policy years beginning on or after January 1, 2016, but before January 1, 2017, small group market issuers may use 1/3 of the disallowed factors;
  •  For policy years beginning on or after January 1, 2017, small group market issuers must be in full compliance with the rating rules under Public Health Service Act section 2701.

If you have any questions, please contact your WGA’s Health Reform Advisory Team at healthreform@WGAins.com. And remember to routinely check the Health Reform Advisory Corner of our website or our blog for important information.