A new set of PPACA insurance mandates, elimination of pre-existing condition exclusions for all ages and deductible and out of pocket maximums, will become effective for many plans beginning on or after January 1, 2014. New rating methodologies will become effective for the small group market as well, removing many of the risk adjustment factors currently utilized by insurers to set rates. These new insurance mandates, combined with the new rating methodologies, may result in increased premiums for employers group health plans and elimination of some current plan design features. To delay the impact of these new rules, some insurers are seeking to move up renewal dates for current insurance policies to late in the 2013 calendar year.
This strategy, while it would preserve current plan designs and potentially lock in lower rates through most of 2014, has not garnered the support of some state lawmakers. Kaiser Health News has reported that some state lawmakers are actively opposing this strategy, while others are encouraging it. For example, regulators in Maryland have discouraged the practice, and just last month, New York passed legislation to bar early renewals designed to delay the applicability of certain provisions of PPACA. Oregon is limiting the sales of non-compliant plans, and requiring that they expire by March 31, 2014. Lawmakers in Arkansas, however, have communicated this strategy as an option for carriers operating within the state.
A number of other organizations, like the Georgetown University Health Policy Institute and the Cato Insitute, have stated that this practice undermines the intent of PPACA and harms consumers entering the new marketplace in 2014. Employers searching for strategies to handle the impact of PPACA on their organization may consider this strategy, but should be aware of the regulatory environment surrounding health insurance and any actions state lawmakers may take to combat strategies designed to delay the full impact of PPACA as long as possible. Click here for the full Kaiser Health News article.
