HHS Extends Transition Policy for Non-ACA Compliant Plans

Since 2014, the Department of Health and Human Services (HHS) has continuously extended a transition policy for certain health plans that do not comply with the Affordable Care Act (ACA).

This policy has been extended another year. Health insurance issuers have the option of renewing current polices for current enrollees without adopting all of the ACA’s market reforms. If the state allows it, issuers can renew noncompliant coverage for policy years beginning on or before October 1, 2021.

These noncompliant plans renewed under the extended transition policy must come into compliance with the ACA’s requirements by January 1, 2022.

The Latest Extension

The insurance market is primarily regulated at the state level; therefore, state governors or insurance commissioners must allow for transition relief in their state. The department stated that it will work with issuers and states to implement this extended policy, including options such as:

  • Policy years that are shorter (but not longer) than 12 months; or
  • Early renewals with a coverage start date of January 1, 2021.

According to the HHS, this approach will facilitate smooth transitions to ACA-compliant coverage, which requires a calendar year policy year in the market for individuals and small businesses.

Impact on Employers

Individuals and small businesses may be able to keep their non-ACA compliant coverage through 2021, depending on the plan or policy year.

This latest extension may also mean that ACA compliance is never required for these transitional plans. In addition, if the ACA is repealed, replaced or amended, the market reforms may no longer apply to these plans.

For more information on this extension, click here.


Should you have any questions regarding this information, please don’t hesitate to reach out to Creative Benefits at 866-306-0200 or solutions@creativebenefitsinc.com.