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Feds Soften Health Plan Cancellation Notice Rules

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The Centers for Medicare & Medicaid Services says that, as far as it’s concerned, an insurer should have up until Halloween to tell Affordable Care Act public exchange plan enrollees about a decision to pull an individual product from the market in 2018.

(Related: California Lets Insurers Put ACA Changes in 2018 Rate Filings)

Officials at the Center for Consumer Information & Insurance Oversight, arm of CMS, announced that position Thursday in a new batch of guidance.

The open enrollment period for 2018 individual coverage is set to run from Nov. 1 through Dec. 15.

The Affordable Care Act requires an insurer to warn enrollees at least 90 days before dropping the product they’re using. For a product going away Jan. 1, 2018, the official 90-day advance notice deadline is Oct. 3.

This year, however, as long as an issuer provides a product withdrawal notice by Oct. 31 — the day before the start of the open enrollment period — “CMS will not take enforcement action against an issuer for failing to send a product discontinuation notice with respect to individual market coverage at least 90 days prior to the discontinuation,” officials say.

The guidance applies to issuers of individual public exchange plans.

90-Day Notice Rule

The individual major medical open enrollment period for 2014 started Oct. 1, 2013. Since then, the open enrollment period has always started on a later date. From 2015 through 2017, many states were still rushing to finalize exchange plan menus on Oct. 3.

“This meant consumers could potentially receive product discontinuation notices without being able to take prompt action to shop for new coverage,” CMS officials say in the new guidance.

Former President Barack Obama was still in the White House from 2015 through 2017. In those years, CMS handled the 90-day notice rule by announcing that it would refrain from enforcing the rule, as long as an issuer warned enrollees by the day before the start of the next open enrollment period, officials say.

For 2018, CMS will follow the precedent set in 2015, 2016 and 2017, officials say.

“States are encouraged to offer similar flexibility to issuers,” officials say.

Although CMS is encouraging states to offer flexibility, the guidance has no direct effect on states’ efforts to enforce their own product withdrawal notice rules.

— Read Actuary Sizes Up 2018 Individual Health Picture on ThinkAdvisor.


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