In light of newly obtained information from the Centers for Medicare and Medicaid Services (CMS) regarding transitional policies, the Office of the Commissioner of Insurance (OCI) is issuing this bulletin to ensure all carriers have the benefit of the most recent interpretations regarding transitional plans. As you are aware OCI issued a bulletin on March 20, 2014, on this topic and provided additional clarification in a communication dated May 14, 2014. Additional information indicating greater flexibility from CMS for issuers offering transitional non-ACA compliant products has recently been conveyed to OCI.
Confusion regarding the federal transitional policy has occurred due to the revolving federally mandated definitions for product and plan. As was clarified in the Patient Protection and Affordable Care Act; Exchange and Insurance Market Standards for 2015 and Beyond; Final Rule issued in May 2014, 45 CFR §144.103 defines product and plan as follows:
"Product" means a discrete package of health insurance coverage benefits that a health insurance issuer offers using a particular product network type within a service area.
"Plan" means, with respect to an issuer and a product, the pairing of the health insurance coverage benefits under the product with a metal tier level [as described in sections 1302 (d) and (e) of the Affordable Care Act] and service area. The product comprises all plans offered within the product, and the combination of all plans offered within a product constitutes the total service area of the product.
The latest guidance we have received from CMS regarding products and plans is as follows:
Essentially all plans within a product must share the exact same benefits, primary network type and issuer. Then, each plan under the product must meet the allowable metal levels and each plan can have its own service area. The product's service area is made up of the combination of all plan service areas, so nothing in our rules or guidance requires all plans within a product to share the same service area. The main reasons for moving plans from one product to another would be driven by aligning benefits or primary network types.
As to new guidance on transitional plans, CMS shared the following with a Wisconsin carrier:
This email confirms our interpretation of the transitional relief provided in the CMS bulletin dated March 5, 2014. While the CMS bulletin does not allow an individual or employer to change from one non-ACA compliant product to another non-ACA compliant product, it would allow an individual or employer to change plan options from one transitional plan to another transitional plan within the same product. This is consistent with our interpretation that the guaranteed renewability requirements apply at the product level as opposed to the plan level.
This guidance is being shared with all insurers authorized to write health insurance coverage to continue Wisconsin's strong, level and competitive market.
Any questions concerning this bulletin should be directed to Diane Dambach at
diane.dambach@wisconsin.gov.