Extension of Transition Policies for Non-ACA Compliant Plans

On March 15, 2021, Division of Insurance Director Deiter issued Bulletin 21-01, permitting health insurance carriers in the individual and small group market to continue transitional health insurance plans that renew for a policy year starting on or before October 1, 2022, if the coverage comes into compliance by January 1, 2023.

As background, on January 19, 2021, CMS provided guidance for a transition policy extension that allows insurers the option to renew non-grandfathered non-ACA-compliant plans, if the state allows. Such transition policies are not required to comply with certain ACA mandates including community rating, coverage of essential health benefits, prohibition on pre-existing condition exclusions and the annual out-of-pocket maximum limit.

Transitional relief for these “grandmothered” plans has been extended several times before, and this bulletin applies the most recent federal extension to South Dakota and allows insurers to renew policies in the individual market and the small group market according to the extended transitional policy for a policy year starting on or before October 1, 2022. This bulletin reflects the Center for Consumer Information and Insurance Oversight’s guidance allowing states the option to extend transitional policies for individual and small group health insurance plans that have continually been renewed since 2014.

Carriers must submit an information filing to the division of their intention to either operate under this transition guidance or discontinue their transition policies by April 21, 2021.

Small employers that are interested in renewing their non-ACA-compliant plan should work with their advisors and insurers.

Bulletin 21-01 »