Midsize firms can keep their plans, too

By Allison Bell

March 06, 2014 at 01:01 PM

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Both small employers and midsize employers that like their coverage might be able to keep it in place until Oct. 1, 2016.

Gary Cohen, the outgoing director of the Center for Consumer Information & Insurance Oversight, raises the possibility in a memo in an "insurance standards bulletin series."

Early Wednesday, news organizations began reporting rumors that CCIIO would be letting individuals keep major medical policies that fail to comply with PPACA insurance standards in force for two more years.

The Obama administration later confirmed it by posting the Cohen memo.

In the early reports, the news organizations noted consumers would be able to keep coverage only if the state regulators and carriers involved agreed.

In the official memo, Cohen says the new pre-PPACA coverage extension will let consumers renew policies through policy years beginning on or after Oct. 1, 2016.

States can make that extension available in the individual market, the small group market, or both.

PPACA now defines a small employer as an employer with 50 or fewer full-time equivalent employees. In 2016, PPACA will also let employers with 51 to 100 FTEs buy small-group coverage through the Small Business Health Options Program exchanges.

A state can offer the two-year pre-PPACA coverage extension to the midsize employers that will move from the large employer category to the small employer category in 2016, Cohen says.

In December, CMS said individuals whose pre-PPACA policies were canceled could qualify for a hardship exemption that would let them buy "catastrophic coverage" with a high deductible but a low premium.

In the new memo, Cohen says CMS will make access to the hardship exemption available to the stranded policyholders until Oct. 1, 2016.

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