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Small Business Employee Benefits and HR Blog

Administration Offers 2-Year Extension for Non-Compliant Health Plans

Announced March 5th, the Obama administration will allow consumers to renew health insurance plans that fail to comply with the new Affordable Care Act (ACA) rules for two years, if their state allows it.extension_on_health_plans

The most recent extension allows existing policy renewals as late as October 1, 2016, so individuals and small businesses could have non-compliant coverage into 2017. 

The additional time comes after the administration already announced one-year extension of canceled health plans in November 2013.

The number of people with non-compliant coverage is unknown. Insurers sent out an estimated 4.5 million cancellation notices last fall, but some of the policyholders have bought new coverage that complies with the law. 

The extension was part of a package of regulations that sets ground rules for 2015, the second year of the public health insurance marketplaces, and the first year that larger employers (100+ employees) could face a penalty for not providing health insurance coverage.

The Department of Health and Human Services (HHS) made the announcement, which outlines the renewal extension and additional guidelines (and changes) for 2015. Here are the highlights:

  • The 2015 open enrollment period will be extended two months, lasting from November 15th through February 15th of next year. 

  • New maximum out-of-pocket costs for 2015 were announced. Annual deductibles and copayments for plans sold on the insurance exchanges cannot exceed $6,600 for individuals or $13,200 for families, a 4% increase from 2014.

  • The 2015 per-member fee paid by most major employer health plans will be $44 per enrollee. It is $63 per enrollee this year, and is scheduled to phase out after 2016. Some plans, including multi-employer arrangements administered by labor unions, will be exempt from these fees in 2015 and 2016.

What do you think of the latest ACA extension? Leave a comment or question below.

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