Bulletin Number 2022-02 Extension of Transitional Policy through Calendar Year 2023

Bulletin 2022-02, Addendum I to Bulletin 2013-12, Page 2 Accordingly, health insurance issuers may renew early or amend the coverage term to permit consumers and small employers to maintain such coverage until CMS announces that all such coverage must come into compliance with the specified requirements. Health insurance issuers electing to renew coverage pursuant to this bulletin are reminded to review the prior bulletins linked to below in their entirety to ensure compliance with the relevant transitional relief guidelines outlined therein. II. QUESTIONS Questions regarding this bulletin should be submitted via email to healthdata@doi.sc.gov and include the company name and primary point of contact (with phone number and email address) for follow up. III. LINKS TO PRIOR TRANSITIONAL POLICY BULLETINS 1. SCDOI Bulletin 2013-12: Transitional Policy for Health Insurance Issuers with Health Insurance Coverage in Effect in the Individual Market and/or the Small Group Market on October 1, 2013 and Special Request for Data from Health Insurance Issuers in the Individual, Small Group, and Large Group Markets, issued November 19, 2013 Web Address: http://doi.sc.gov/DocumentCenter/View/7287 2. Addendum A to SCDOI Bulletin 2013-12: Addendum to Bulletin 2013-12 to Address the Federal Guidance Specific to Required Notices to Impacted Policyholders, issued November 25, 2013 Web Address: http://doi.sc.gov/DocumentCenter/View/7306 3. SCDOI Bulletin 2014-05: Addendum B to Bulletin 2013-12 to the Federal Extension of the Transitional Policy for Health Insurance Issuers with Non-Grandfathered Health Insurance Coverage in the Individual Market and/or the Small Group Market, Application of the Transitional Policy to Current Large Groups with 51 to 100 Employees, and Special Request for Data from Health Insurance Issuers in the Individual, Small Group, and Large Group Markets, issued April 14, 2014 Web Address: http://doi.sc.gov/DocumentCenter/View/7522 4. SCDOI Bulletin 2016-01: Addendum C to Bulletin 2013-12 to Address the Federal Extension of the Transitional Policy through Calendar Year 2017 for Health Insurance Issuers with Non-Grandfathered Health Insurance Coverage in the Individual or Small Group Markets, issued March 29, 2016 Web Address: http://doi.sc.gov/DocumentCenter/View/8795 5. SCDOI Bulletin 2017-02: Addendum D to Bulletin 2013-12 to Address the Federal Extension of the Transitional Policy through Calendar Year 2018 for Health Insurance Issuers with Non-Grandfathered Health Insurance Coverage in the Individual or Small Group Markets, issued April 21, 2017 Web Address: http://doi.sc.gov/DocumentCenter/View/9952 6. SCDOI Bulletin 2018-01: Addendum E to Bulletin 2013-12 to Address the Federal Extension of the Transitional Policy through Calendar Year 2019 for Health Insurance Issuers with Non-Grandfathered Health Insurance Coverage in the Individual or Small Group Markets, issued April 20, 2018 Web Address: https://doi.sc.gov/DocumentCenter/View/10760/Bulletin-2018-01-Addendum-E-to- Bulletin-2013-12-re-Transitional-Policy-Extension?bidId= Bulletin 2022-02, Addendum I to Bulletin 2013-12, Page 3 7. SCDOI Bulletin 2019-01: Addendum F to Bulletin 2013-12 to Address the Federal Extension of the Transitional Policy through Calendar Year 2020 for Health Insurance Issuers with Non-Grandfathered Health Insurance Coverage in the Individual or Small Group Markets, issued March 28, 2019 Web Address: https://doi.sc.gov/DocumentCenter/View/11456/Bulletin-2019-01---Transitional-Policy- Extension?bidId= 8. SCDOI Bulletin 2020-01: Addendum G to Bulletin 2013-12 to Address the Federal Extension of the Transitional Policy through Calendar Year 2021 for Health Insurance Issuers with Non-Grandfathered Health Insurance Coverage in the Individual or Small Group Markets, issued February 19, 2020 Web Address: https://doi.sc.gov/DocumentCenter/View/12598/Bulletin-2020-01_Transitional-Policy- Extension-02192020 9. SCDOI Bulletin 2021-01: Addendum H to Bulletin 2013-12 to Address the Federal Extension of the Transitional Policy through Calendar Year 2022 for Health Insurance Issuers with Non-Grandfathered Health Insurance Coverage in the Individual or Small Group Markets, issued January 25, 2021 Web Address: https://doi.sc.gov/DocumentCenter/View/13247/Bulletin-2021-01-Transitional-Policy- Extension-01252021 Bulletins are the method by which the Director of Insurance formally communicates with persons and entities regulated by the Department. Bulletins are Departmental interpretations of South Carolina insurance laws and regulations and provide guidance on the Department’s enforcement approach. Bulletins do not provide legal advice. Readers should consult applicable statutes and regulations or contact an attorney for legal advice or for additional information on the impact of that legislation on their specific situation. Bulletin 2022-02, Addendum I to Bulletin 2013-12, Page 4 BULLETIN 2022-02, ADDENDUM I TO BULLETIN 2013-12 APPENDIX I CCIIO INSURANCE STANDARDS BULLETIN DATED MARCH 23, 2022 (SEE THE FOLLOWING SEVEN PAGES) [THIS SPACE INTENTIONALLY LEFT BLANK] DEPARTMENT OF HEALTH & HUMAN SERVICES Centers for Medicare & Medicaid Services Center for Consumer Information and Insurance Oversight 200 Independence Avenue SW Washington, DC 20201 Date: March 23, 2022 From: Dr. Ellen Montz, Director, Center for Consumer Information and Insurance Oversight Title: Insurance Standards Bulletin Series – INFORMATION – Extension of Limited Non-Enforcement Policy through 2023 and Later Benefit Years Subject: Extended Non-Enforcement of Affordable Care Act-Compliance with Respect to Certain Policies I. Purpose This bulletin extends the Centers for Medicare & Medicaid Services’ (CMS) policy under which CMS will not take enforcement action against certain non-grandfathered health insurance coverage in the individual and small group market that is out of compliance with certain specified market reforms. The extended non-enforcement policy1 in this bulletin applies for policy years beginning after October 1, 2022, and will remain in effect until CMS announces that all such coverage must come into compliance with the specified requirements. II. Background On November 14, 2013, CMS issued a letter to the State Insurance Commissioners outlining a transitional policy for certain non-grandfathered coverage in the small group and individual health insurance markets.2 CMS announced in its November 14, 2013 letter that, if allowed by applicable State authorities, health insurance issuers would be able to choose to continue certain coverage that could not otherwise remain in place without significant changes to comply with Affordable Care Act requirements, and individuals and small businesses with such coverage could, as a result, choose to re-enroll in such coverage. CMS further stated that, under the non- enforcement policy, non-grandfathered health insurance coverage in the individual or small group market that is renewed for a policy year starting between January 1, 2014 and October 1, 2014 would not be treated as being out of compliance with certain market reforms set forth below if certain specific conditions are met. 1 While this bulletin refers to a “non-enforcement policy” and some of the previous bulletins on this topic referred to a “transitional policy,” the substance of the policy remains unchanged. 2 Centers for Medicare & Medicaid Services, “Letter to State Insurance Commissioners” (Nov. 14, 2013), available at https://www.cms.gov/cciio/resources/letters/downloads/com missioner-letter-11-14-2013.pdf 1 2 CMS has continuously extended this non-enforcement policy, with the most recent extension in effect until policy years beginning on or before October 1, 2022, provided that all such coverage comes into compliance by January 1, 2023.3 As provided in previously issued guidance, health insurance coverage subject to the non- enforcement policy is not treated as out of compliance with the following provisions of the Public Health Service Act (PHS Act): • Section 2701 (relating to fair health insurance premiums); • Section 2702 (relating to guaranteed availability of coverage); • Section 2703 (relating to guaranteed renewability of coverage); • Section 2704 (relating to the prohibition of pre-existing condition exclusions or other discrimination based on health status), with respect to adults, except with respect to group coverage; • Section 2705 (relating to the prohibition of discrimination against individual participants and beneficiaries based on health status), except with respect to group coverage;4 • Section 2706 (relating to non-discrimination in health care); • Section 2707 (relating to comprehensive health insurance coverage); and • Section 2709, as codified at 42 U.S.C. § 300gg-8 (relating to coverage for individuals participating in approved clinical trials). Additionally, health insurance coverage subject to the non-enforcement policy is not treated as out of compliance with section 1312(c) of the Affordable Care Act (relating to the single risk pool requirement). As a reminder, issuers can choose to comply with some or all of these provisions in their renewed policies. III. Guidance CMS is committed to bringing all non-grandfathered coverage in the individual and small group markets into compliance with all applicable Affordable Care Act requirements. However, we are extending our non-enforcement policy to policy years beginning after October 1, 2022. Specifically, states may allow issuers that have renewed coverage under the non-enforcement policy continually since 20145 to renew such coverage for a policy year starting after October 1, 2022. This extended non-enforcement policy will remain in effect until CMS announces that coverage renewed under this non-enforcement policy must come into compliance with the relevant requirements. 3 Centers for Medicare & Medicaid Services, “Insurance Standards Bulletin Series –INFORMATION—Extension of Limited Non- Enforcement Policy through 2022” (Jan.19, 2021), available at: https://www.cms.gov/files/document/extension-limited-non- enforcement-policy-through-calendar-year-2022.pdf 4 We note that section 702 of the Employee Retirement Income Security Act and section 9802 of the Internal Revenue Code remain applicable to group health plan coverage 5 For purposes of determining whether coverage has been renewed continually, see the definition of when a product will be considered the same “product” under 45 CFR 144.103. 3 States can elect to extend the non-enforcement policy for shorter periods than outlined above.6 States may also apply the non-enforcement policy to fewer market reform provisions than outlined above but may not extend it to additional provisions. Furthermore, states may choose to adopt the extended non-enforcement policy in the following manner: • For both the individual and the small group markets, • For the individual market only, or • For the small group market only. Under the extended non-enforcement policy, health insurance coverage in the individual or small group market that meets the criteria of the extended non-enforcement policy and associated group health plans of small businesses, as applicable, will not be treated by CMS as out of compliance with the market reforms as specified above. Health insurance issuers that renew coverage under this extended non-enforcement policy, must, for each policy year, provide the relevant attached notice to affected individuals and small businesses as specified in previously issued guidance.7 All health insurance coverage subject to this non-enforcement policy that has rate increases subject to review under PHS Act section 2794 should use the rules and processes for submission to states and CMS that were updated April 9, 2018,8 to ensure compliance with PHS Act section 2794 requirements. IV. Where to get more information If you have any questions regarding this guidance, please e-mail CCIIO at: marketreform@cms.hhs.gov. 6 Following enactment of the Protecting Affordable Coverage for Employees Act (Pub. L. 114-60), the non- enforcement policy in the March 5, 2014 guidance for certain eligible large employers no longer applies. However, states that elect to expand the definition of small employer to 1-100 employees may, under State law authority, choose to provide transition relief to those employers, as appropriate. 7 Because these are required standard notices that cannot be modified, the Paperwork Reduction Act does not apply to these notices. 8 Centers for Medicare & Medicaid Services, “Rate Review Justification (RRJ) Reporting Requirements for Transitional Plans” (April 9, 2018), available at https://www.cms.gov/CCIIO/Resources/Regulations-and- Guidance/Downloads/2019-RRJ- Instructions.pdf 4 Attachment 1 This notice must be used when a cancellation notice has already been sent and the issuer is providing an option to the policyholder to continue the existing coverage: Dear Policyholder, We previously notified you that your current policy is being cancelled because it does not meet the minimum standards required by the Affordable Care Act. We are now writing to inform you that, consistent with federal guidance, you may keep this coverage for the upcoming policy year. How Do I Keep My Current Policy? To keep your current policy, please contact us. As you think about your options, there are some things to keep in mind. If you choose to renew your current policy, it may NOT provide all of the protections of the Affordable Care Act. These include one or more of the following new protections of the Public Health Service Act (PHS Act) that were added by the health care law and took effect for coverage beginning in 2014. If you choose to renew your current policy, your coverage: • May not meet standards for fair health insurance premiums, so you might be charged more based on factors such as gender or a pre-existing medical condition, and it might not comply with rules limiting the ability to charge older people more than younger people (PHS Act section 2701). • May not meet standards for guaranteed availability, so it might exclude consumers based on factors such as a pre-existing medical condition (PHS Act section 2702). • May not meet standards for guaranteed renewability (PHS Act section 2703). • If the coverage is an individual market policy, may not meet standards related to pre- existing medical conditions for adults, so it might exclude coverage for treatment of an adult’s pre-existing medical condition such as diabetes or cancer (PHS Act section 2704). • If the coverage is an individual market policy, may not meet standards related to discrimination based on health status (PHS Act section 2705). • May not meet standards for non-discrimination with respect to health care providers (PHS Act section 2706). • May not cover essential health benefits or limit annual out-of-pocket spending, so it might not cover benefits such as prescription drugs or maternity care, or might have unlimited cost-sharing (PHS Act section 2707). • May not meet standards for participation in clinical trials, so you might not have coverage for services related to a clinical trial for a life-threatening or other serious disease (PHS Act section 2709). How Do I Choose A Different Policy? You have options for getting quality health insurance. [You may shop in the Health Insurance 5 Marketplace, where all policies meet certain standards to help guarantee health care security, and no one who is qualified to purchase coverage through the Marketplace can be turned away or charged more because of a pre-existing medical condition. The Marketplace allows you to choose a private policy that fits your budget and health care needs. You may qualify for tax credits or other federal financial assistance to help you afford health insurance coverage purchased through the Marketplace.]9 [You can also get new health insurance outside the Marketplace.] All new policies guarantee certain protections, such as your ability to buy a policy even if you have a pre-existing medical condition. [However, federal financial assistance is not available outside the Marketplace.] You should review your options as soon as possible, because you may have to buy your coverage within a limited time period. How Can I Learn More? To learn more about the Health Insurance Marketplace and protections under the health care law, visit HealthCare.gov or call 1-800-318-2596 or TTY: 1-855-889-4325. If you have questions, please contact us. 9 The bracketed language does not apply to the U.S. territories that do not have a Marketplace. 6 Attachment 2 This notice must be used when a cancellation notice has not yet been sent and the issuer is providing an option to the policyholder to continue the existing coverage: Dear Policyholder, We are writing to inform you that, consistent with federal guidance, you may keep your existing coverage for the upcoming policy year. How Do I Keep My Current Policy? To keep your current policy, please contact us. As you think about your options, there are some things to keep in mind. If you choose to renew your current policy, it may NOT provide all of the protections of the Affordable Care Act. These include one or more of the following new protections of the Public Health Service Act (PHS Act) that were added by the health care law and took effect for coverage beginning in 2014. If you choose to renew your current policy, your coverage: • May not meet standards for fair health insurance premiums, so you might be charged more based on factors such as gender or a pre-existing medical condition, and it might not comply with rules limiting the ability to charge older people more than younger people (PHS Act section 2701). • May not meet standards for guaranteed availability, so it might exclude consumers based on factors such as a pre-existing medical condition (PHS Act section 2702). • May not meet standards for guaranteed renewability (PHS Act section 2703). • If the coverage is an individual market policy, may not meet standards related to pre- existing medical conditions for adults, so it might exclude coverage for treatment of an adult’s pre-existing medical condition such as diabetes or cancer (PHS Act section 2704). • If the coverage is an individual market policy, may not meet standards related to discrimination based on health status (PHS Act section 2705). • May not meet standards for non-discrimination with respect to health care providers (PHS Act section 2706). • May not cover essential health benefits or limit annual out-of-pocket spending, so it might not cover benefits such as prescription drugs or maternity care, or might have unlimited cost sharing (PHS Act section 2707). • May not meet standards for participation in clinical trials, so you might not have coverage for services related to a clinical trial for a life-threatening or other serious disease (PHS Act section 2709). How Do I Choose A Different Policy? You have options for getting quality health insurance. [You may shop in the Health Insurance Marketplace, where all policies meet certain standards to help guarantee health care security, and no one who is qualified to purchase coverage through the Marketplace can 7 be turned away or charged more because of a pre-existing medical condition. The Marketplace allows you to choose a private policy that fits your budget and health care needs. You may qualify for tax credits or other federal financial assistance to help you afford health insurance coverage purchased through the Marketplace.]10 [You can also get new health insurance outside the Marketplace.] All new policies guarantee certain protections, such as your ability to buy a policy even if you have a pre-existing medical condition. [However, federal financial assistance is not available outside the Marketplace.] You should review your options as soon as possible, because you may have to buy your coverage within a limited time period. How Can I Learn More? To learn more about the Health Insurance Marketplace and protections under the health care law, visit HealthCare.gov or call 1-800-318-2596 or TTY: 1-855-889-4325. If you have questions, please contact us. 10 The bracketed language does not apply to the U.S. territories that do not have a Marketplace.