On March 5, the U.S. Department of Health and Human Services (HHS) announced that consumers whose health insurance plans do not comply with the Affordable Care Act (ACA) may now be renewed until October 1, 2016. The extension will allow noncompliant plans to remain in effect until as late as September 30, 2017. HHS issued a detailed fact sheet regarding the extension and other related ACA matters.
The extension, the latest in a series of waivers and extensions of various deadlines in the ACA, stems from lingering political fallout from President Obama’s oft-reiterated (and since oft-criticized) promise that those who were happy with their insurance policies would be able to keep them after the ACA went into effect. Despite the President’s statement, the ACA’s imposition of minimum coverage requirements led to many issuers of noncompliant plans sending out cancellation notices for 2014 beginning on October 1, 2013. On November 14, 2013, the President announced that plans that didn’t comply with the ACA’s minimum coverage requirements would be allowed to be renewed or reinstated for one year, and a White House fact sheet at that time had stated that additional extensions would be considered.
Yesterday’s further two-year extension may have been, in part, an attempt by the White House to curry favor with voters in anticipation of some close midterm Congressional election races this fall. HHS’s announcement said that a number of Democratic senators, including Mark Warner (D-VA), Mary Landrieu (D-LA), Jeanne Shaheen (D-NH), Mark Udall (D-CO) and Mark Begich (D-AK), had consulted with it regarding the extension, which will expire just before the 2016 presidential election.
In separate statements, HHS Secretary Kathleen Sebelius and spokeswoman Joanne Peters both said that the Obama administration would do all it can to “smooth the transition” to the new law for consumers. The new extension, however, is subject to state insurance regulators permitting the affected policies to be renewed.
Yesterday’s HHS announcement also included certain program changes to adjust for the extension’s anticipated effect on the overall 2014 insurance risk pool, and a number of comparatively minor tweaks to other ACA deadlines and requirements.