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PPACA tips: How to kill a health plan

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A health insurer that wants to change its major medical product menu in 2015 will have to think hard about where the enrollees go next.

Jackie Garner, the new acting director at the Center for Consumer Information & Insurance Oversight (CCIIO), talks about the rules governing major medical product menu changes in a bulletin aimed at insurers. The bulletin applies to all major medical products, including the qualified health plans (QHPs) sold through the Patient Protection and Affordable Care Act (PPACA) exchange system, grandfathered plans, and PPACA-compliant plans sold outside the exchange system.

PPACA now requires a health insurer to guarantee the renewability of any individual or group major medical product, Garner writes. An insurer can cancel coverage only if it kills an entire product line in a market or stops selling any coverage in a market. An insurer is supposed to warn individual coverage holders or group plan sponsors 90 calendar days before shutting down a plan.

CCIIO — an arm of the U.S. Department of Health and Human Services (HHS) — manages HHS-run public exchanges in some states, and it manages state-based exchanges in other states. The 2015 PPACA exchange open enrollment period is set to start Nov. 15, 2014, and end Feb. 15, 2015.

Normally, PPACA would require a health insurer that is killing a plan Jan. 1, 2015, to get discontinuation notices to sponsors or enrollees by Oct. 3.

This year, Garner writes, CCIIO would rather see the issuers get the notices to sponsors and enrollees while the open enrollment period is under way, when consumers can easily buy 2015 coverage, rather than getting the notices to consumers so early that the consumers might forget to buy replacement coverage.

CCIIO wants states to help give insurers the ability to coordinate plan discontinuation notice timing with the open enrollment period, Garner says.

Garner also talks about what will happen when insurers kill specific products, or withdraw from some or all markets. In the past, she says, insurers may have tried to help enrollees in that situation by moving the enrollees to coverage issued by another carrier.

Now, under PPACA, an issuer that leaves a market may be able to move enrollees into plans from another licensed issuer, if state law permits that, Garner says. If an issuer simply kills a specific product, the issuer must offer the enrollees “the option to purchase, on a guaranteed availability basis, any other health insurance coverage offered by the issuer in that market,” Garner says.

Simply moving the enrollees into another company’s plan won’t meet the PPACA requirements, even if “the other company” is a sister company of the issuer of the original coverage, Garner says.


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