Bulletin No. B-4.

66

Non-ACA-Compliant Health Benefit Plans in 2014

I. Background and Purpose

The purpose of this bulletin is to clarify the Division of Insurances (Division) position on President
Obamas recent announcement that the federal government will allow consumers to keep and
renew their current policies, into and beyond 2014 by delaying the enforcement of ACA market
reforms in 2014 for plans that are currently in effect.

Bulletins are the Divisions interpretations of existing insurance law or general statements of
Division policy. Bulletins themselves establish neither binding norms nor finally determine issues
or rights.

II. Applicability and Scope

This bulletin is intended for the public, and all group and individual health benefit plans issued by
licensed carriers, including health maintenance organizations, in the state of Colorado.

III. Division Position

Grandfathered plans are those plans that were in existence on or before March 23, 2010, that are
not subject to the market reforms of the ACA. If no significant changes are made to these plans,
such plans can maintain grandfathered status as long as they are maintained as such by the
carrier, and remain exempt for ACA protections and reforms, such as providing the essential
health benefits, or eliminating pre-existing conditions. Non-grandfathered plans are those plans
issued after March 23, 2010, which, upon their first renewal in 2014, must come into compliance
with the full set of market reforms of the ACA effective on J anuary 1, 2014. Many carriers have
made a business decision to discontinue their current non-grandfathered plans which do not meet
the new requirements effective J anuary 1, and issue new ACA-compliant plans, rather than
attempt to bring existing non-grandfathered plans into full compliance with the ACA and new
Colorado laws.

House Bill 13-1266 (the Alignment Bill), which was passed into law by the Colorado Legislature
this past spring, brought Colorado state law into alignment with federal health care reform law.
This codified the health reforms mandated at the federal level for non-grandfathered plans issued
or renewed on or after J anuary 1, 2014. All existing plans can be renewed in 2013, however,
upon their renewal in 2014, all non-grandfathered plans must be in compliance with federal and
state health care reforms. Asking carriers to do otherwise would risk destabilizing the market and
lead to increased costs and consumer confusion.

Current Colorado law does not prohibit the early renewal of existing health benefit plans through
December 31, 2013, and many consumers have chosen this option. Such early renewals have
and continue to provide consumers the choice to keep their current health benefit plans until
renewal in 2014. It is important to note that consumers choosing to early renew their health plans
Bulletin B-4.66 Effective December 6, 2013
cannot take advantage of any federal financial assistance available to reduce the cost of health
insurance, which is only available to those purchasing plans through Connect for Health
Colorado. Further, carriers that allowed early renewals were required to inform consumers of any
rate increases associated with their plan for 2014, so that consumers were able to make an
informed decision about what is best for them and their families. Early renewal may be appealing
for some, but early renewal plans will not have the coverage and protections required by the ACA
and Colorado law.

Carriers are required to make consumers aware of their other options, such as the possibility of
buying insurance with another carrier and shopping for coverage through Connect for Health
Colorado, Colorados health exchange, throughout the early renewal and policy cancellation
process. The Division continues to encourage consumers to read all carrier-supplied notifications
closely, as they contain important information about renewal, the options available for the
purchase of new plans, and the availability of federal financial assistance. The cancellation and
discontinuance of policies are a common occurrence in the health insurance industry, but have
recently come under increased scrutiny due to the implementation of the ACA.

The Commissioner of Insurance has determined that it is in the best interest of Colorado to
continue with the implementation of the health insurance reforms as currently found in the ACA
and Colorado statutes. Current state law does not allow for the renewal of non-grandfathered,
non-ACA-compliant plans into 2015.

IV. Additional Division Resources

A. For More Information

Colorado Division of Insurance
Rates and Forms Section
1560 Broadway, Suite 850
Denver, CO 80202
Tel. 303-894-7499
Internet: http://www.dora.colorado.gov/insurance

V. History

Issued December 6, 2013.
Bulletin B-4.66 Effective December 6, 2013