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Thursday, 26 June 2014 02:27

Should You Take Advantage of Transitional Relief?

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Transitional Relief (affectionately known as “Grandmothering”) has become the new buzz word in the world of healthcare reform, especially for those with coverage in the small group or individual health insurance markets. 

Background

The Affordable Care Act (ACA) implemented new standard of coverage to health insurance policies beginning in 2014. In order to comply with the new changes, small groups and individuals would have to drop their existing health policies and purchase an ACA compliant plan. Under great pressure from consumers, the Obama Administration announced a transitional relief policy. 

What is Transitional Relief and how does it affect your organizations health plan? 

 

Transitional relief allows individual and small group, fully insured, non-grandfathered policyholders the ability to continue on non-compliant plans.

  • On March 6, 2014, the Centers for Medicare and Medicaid Services (CMS) announced it would extend the transitional relief for two years, with the possibility of adding a one year extension, if needed. 
  • It was left up to the States and carriers to decide whether or not to offer transitional relief, and the Colorado Division of Insurance announced in May they would allow it in Colorado. 
  • Recently the following carriers announced their position on transitional relief:

                Anthem – Beginning 10/1 Effective Dates

                Humana – Will NOT offer transitional relief

                Kaiser – Beginning 10/1 Effective Dates

                Rocky Mountain Health Plans – Beginning 9/1 Effective Dates

                SeeChange – Has yet to announce decision

                United Healthcare – Already offering relief since 6/1 effective dates

What does this mean to you? Before taking advantage of the transitional relief, consider the following:

  • Transitional plans can continue to offer composite rates for groups of 10+, which are far easier to administer.
  • Consider how your plan design will compare. Non-ACA plans tend to have Out-of-Pocket (OOP) Maximums all over the map, whereas most ACA compliant plans tend to cluster their OOP Max right at the new limit of $6,350 single/$12,700 family. What will best meet your benefit goals?
  • Transitional plans can continue to rate using the full age-rating spectrum and industry rating. This will particularly benefit younger groups in favorable industries. Older groups might actually benefit by moving to the compliant plans immediately.

With the ever-changing rules of healthcare reform, we always want you to receive the most up to date information. If you would like to talk through how this option might affect you, Fall River is always available to help. Please feel free to contact Kristen, Tonya or Amy at (303) 369-3200, or This email address is being protected from spambots. You need JavaScript enabled to view it.

 

Read 6685 times Last modified on Monday, 14 September 2020 20:29
Amy De Lorenzo

Amy Johnston is an Account Manager with extensive experience working with both large and small employers as a broker.  In addition to five years of broker experience prior to joining Fall River, she also brings eight years of insurance carrier expertise.  Amy is an expert on ERISA, the Affordable Care Act, and other compliance issues.

Ms. Johnston received a Bachelor of Arts degree in Communications from Colorado State University. She is a Colorado native from Steamboat Springs, and loves spending time in the mountains with her husband, two children, and Tucker the cocker spaniel. She enjoys snowshoeing, hiking, and philanthropy work to promote education.