CMS issues guidance for consumers whose substandard insurance coverage will be cancelled in 2014

The Affordable Care Act (“ACA”) provides new consumer protections.  In light of these consumer protections, some health insurance carriers cancelled certain individual health policies for plan years beginning in 2014 that were substandard and did not meet the “minimum value” insurance required by the ACA. 

On December 19, 2013 and January 3, 2014, the Centers for Medicare and Medicaid Services (CMS) issued guidance for those consumers who received cancellation letters from their insurance carriers because their insurance did not meet the standards for “minimum value” insurance.  CMS set forth several options for individuals who may have received a cancellation notice:

  • Under certain circumstances, cancelled plans and policies may be renewed for a transition periodwhich runs from January 1, 2014 through October 1, 2014;
  • Individuals may purchase another health insurance policy from their health insurance issuer in the individual market;
  • Individuals may purchase health insurance through the Health Insurance Marketplace, in California – Covered California, where they may be eligible for a premium tax credit or cost-sharing reductions based on their income and other factors;
  • Individuals may purchase a health insurance policy in the individual market outside of the Health Insurance Marketplace; or
  • Individuals who received a cancellation letter will be eligible for a hardship exemption under the ACA and will be able to enroll in catastrophic coverage available in their area.  In order to enroll in catastrophic coverage, individuals must (1) complete a hardship exemption form, and (2) provide proof that their previous policy was cancelled.

For more information regarding the ACA, please contact your Trust Fund counsel.

By Ezekiel Carder | January 14, 2014

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