White House Announces Transition Policy for Canceled Health Plans

Over the last few months, millions of Americans have received notices informing them that their health insurance plans are being canceled because they do not comply with the Affordable Care Act’s reforms.  Responding to pressure from consumers and Congress, on Nov. 14, 2013, President Obama announced a new transition policy for 2014.  Under the new policy, individuals and small businesses whose coverage has been canceled (or would be canceled) because it does not meet the ACA’s standards may be able to re-enroll or stay on their coverage for an additional year.

However, this one-year reprieve may not be available to all consumers.  Because the insurance market is primarily regulated at the state level, state governors or insurance commissioners will have to allow for the transition relief.  In addition, health insurance issuers are not required to follow the transition relief and renew plans, and have expressed concern that the change could disrupt the new risk pool under the federal and state Health Insurance Marketplaces.