On January 19, the federal Centers for Medicare and Medicaid Services (CMS) released a bulletin allowing states to permit insurers to renew transitional policies as long as such policies come into compliance with certain specified market reforms by January 1, 2023. Specifically, the new guidance on transitional plans extends the use of transitional plans through December 31, 2022. In light of this new federal guidance, the Office of the Commissioner of Insurance (OCI) is issuing this bulletin to allow for the extension of these plans as outlined by CMS.
There is a potential that in the 2022 plan year insurers will again face an issue of policies that end prior to December 31, 2022, or if renewed in 2022 will extend beyond December 31, 2022. CMS’s guidance states that policies must be fully ACA compliant by January 1, 2023. To achieve this, CMS and OCI will allow a policy to renew with a term that is less than 12-months or will allow an option to renew policies early in order to facilitate transition to fully ACA-compliant policies starting January 1, 2023. For policies that end prior to December 31, 2022, insurers may renew policies with a shorter term in order to avoid a gap in coverage prior to the 2023 plan year.
OCI encourages insurers to work with small employers and consumers to ensure smooth transitions.
In addition, OCI requires insurers offering individual transitional plans to provide individual insureds the “Important Consumer Notice.” This notice shall be provided to the individual as a cover letter to the federally required notice when a transitional policy is renewed, nonrenewed, or cancelled. The OCI will monitor insurers to ensure that during the shorter term gap coverage period, premium and cost-sharing are continued without resetting or rating if the only change is coverage to avoid a gap through December 31, 2022.