The Office of Commissioner of Insurance (OCI) previously issued guidance for group and individual transitional policies via bulletins on November 21, 2013 (oci.wi.gov/bulletin/1113healthplans.htm), March 20, 2014 (oci.wi.gov/bulletin/0314transitionalpol.htm), and October 28, 2014 (oci.wi.gov/bulletin/1014transitionalpol.htm). Deputy Commissioner Dan Schwartzer also sent a letter to all insurers on May 14, 2014, further clarifying the March 2014 bulletin. In short, the guidance allows insurers the option to offer to renew their customer's non-grandfathered, non-ACA compliant plans purchased on or before December 31, 2013, at least until October 1, 2016. The guidance further clarifies that consumers may switch from one non-ACA compliant plan to another provided both the new plan and the old plan are part of the same product group.
Recently, OCI has received numerous inquiries surrounding transitional relief for large employers with 51-100 employees which expressed the concern that the above guidance on transitional policies does not provide insurers with necessary clarity. Under federal law, the definition of "small employer" will change from the state definition of 2-50 total employees to the federal definition of 1-100 total employees effective January 1, 2016. This bulletin specifically clarifies the transitional relief offered to employers impacted by the small group definition change effective January 1, 2016. It is the intent of OCI to ensure employers impacted by the definition change and their insurance carriers are able to maintain continued access to coverage eligible for transitional relief.
On May 16, 2014, the Centers for Medicare and Medicaid Services (CMS) Center for Consumer Information and Insurance Oversight (CCIIO) issued an FAQ on Health Insurance Market Reforms and Marketplace Standards (www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/Final-Master-FAQs-5-16-14.pdf). In the FAQ, CCIIO stated that the extended transitional policy outlined in a letter to state insurance commissioners on November 13, 2013 (oci.wi.gov/bulletin/1113healthplans.htm) will apply in 2016 to large employers with 51-100 employees that purchase health insurance coverage effective before January 1, 2016. Consistent with state requirements and OCI enforcement authority, OCI will allow insurers to renew existing coverage for employers with 51-100 employees, at the employer's option, provided the coverage was in effect prior to January 1, 2016. It is important to note that this transitional relief does not apply to "grandfathered" plans which will not be impacted by the law change. This guidance will apply to all non-grandfathered insurance plans purchased by employers with 51-100 total employees before January 1, 2016. Policies renewed on or before October 1, 2016, will be allowed to keep their group-size status at least through the end of their plan year in 2017. As outlined in previous bulletins, insurers are allowed to offer employers an early renewal option.
It is important to note that coverage must have been in force on January 1, 2016. The guidance contained in this bulletin does not apply to "newly obtained coverage" issued on or after January 1, 2016. "Newly obtained coverage" does NOT include normal enrollment changes (i.e., adding dependents or new employees) nor does it include coverage that has merely received a price change or plan changes such as modified copayments, coinsurance, deductibles or provider networks before or after January 1, 2016. Consistent with Wisconsin insurance laws and regulations, the 51-100 employee large business may change its plan options from one large employer plan to another and renew that coverage provided:
- Coverage was in force for the employer with the insurer before January 1, 2016; and
- The new plan offered by the insurer was available for purchase prior to January 1, 2016.
Carriers opting to allow an early renewal option to affected employer plans must provide disclosure to the employer including a notice that the employer's premium may be affected either on the date of renewal or in advance of the date on which the premium change will be affected.
There is no requirement in Wisconsin state law or regulations that would require insurers or employers to take advantage of federal transitional relief.
Any questions concerning this bulletin should be directed to J. P. Wieske at
jp.wieske@wisconsin.gov or (608) 266-2493.