Cancelation of Coverage: The “Fix”

Cancelation of Coverage:    The “Fix”

With the rollout of mandated changes to health plans beginning in January, many consumers found themselves receiving letters explaining that their coverage would be canceled and need to be replaced with a qualified health plan.  For employer sponsored plans, this change would be automatic and would not happen until their plan renews in 2014.  However for some with individual insurance, they are being forced to shop for new coverage or be faced with no insurance.   This situation led President Obama to announce on November 14th a potential “fix”.  His offer was to allow insurance companies to continue allowing the pre-ACA compliant plans for an additional year.  

  • At this time it remains unclear how insurers will react. Some state regulators may not even allow the insurers to consider this option.
  • This order only affects plans that are in- force, it does not change plans that are being purchased for 1/1/14 or later.
  • This order only gives insurers the opportunity to extend plans beyond 1/1/14. It does not require them to do so. We do not yet know if any insurers in Kentucky, Ohio, or Indiana will change what they are doing as a result of this order.

Individuals may not in reality have any new opportunities available to them. If it made sense for them to “early renew” their plan for December 1st they should probably still do so.