1
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 14, 2014
From: Gary Cohen, Director, Center for Consumer Information & Insurance Oversight
Title: Insurance Standards Bulletin Series -- INFORMATION
Subject: Draft Notices When Discontinuing or Renewing a Product in the Group or
Individual Market
I. Purpose
Contemporaneously with the issuance of this bulletin, CMS is releasing a proposed rule titled,
“Patient Protection and Affordable Care Act; Exchange and Insurance Market Standards for
2015 and Beyond.” This bulletin provides draft notices that would be required to be used if the
proposed rule is finalized. Comments may be submitted on the draft notices as described in
section III of this bulletin.
II. Background
The Public Health Service (PHS) Act requires health insurance issuers offering health insurance
coverage in the group and individual markets, through or outside of the Marketplaces, to
guarantee the renewal of coverage unless at least one of several listed exceptions applies. This
requirement applies to both grandfathered and non-grandfathered health plans. (See PHS Act
sections 2703 and 2742 and regulations at 45 CFR §§ 146.152, 147.106 and 148.122).
One exception to the guaranteed renewability requirement permits an issuer to cease offering a
particular product in the large group, small group, or individual market and to discontinue
existing blocks of business with respect to that product (“product withdrawal”). This may be
done, in accordance with applicable State law, as long as the issuer meets all of the following
requirements:
• Provide written notice to each plan sponsor or individual provided that particular product
(and to all participants and beneficiaries covered under such coverage) at least 90
calendar days before the date the coverage will be discontinued;
2
• Offer to each plan sponsor or individual provided that particular product the option to
purchase, on a guaranteed availability basis, any other coverage offered by the issuer in
that market; and
• Act uniformly without regard to the claims experience or any health status-related factor
relating to individuals when discontinuing that product and offering the option of other
coverage.
Additionally, the PHS Act contains an exception to the guaranteed renewability requirements for
“uniform modifications of coverage.” These provisions permit an issuer to modify the health
insurance coverage for a product offered to a group health plan or an individual only at the time
of coverage renewal, if the modification is consistent with State law and effectively uniformly
for all group health plans or individuals with that product. (See PHS Act section 2703(d) and
regulations at 45 CFR §§ 146.152(f) and 147.106(e) (group market) and PHS Act section
2742(d) and §148.122(g) (individual market)).
III. Standard Notices and Request for Comment
As indicated earlier, contemporaneously with the issuance of this bulletin, CMS is releasing a
proposed rule titled, “Patient Protection and Affordable Care Act; Exchange and Insurance
Market Standards for 2015 and Beyond.” In the proposed rule, we propose that, in order for an
issuer discontinuing a product to satisfy the 90-day notice requirement under the PHS Act, the
issuer must provide notice “in a form and manner specified by the Secretary.” We also propose
that an issuer renewing health insurance coverage must provide notice “in a form and manner
specified by the Secretary.”
Included with this bulletin are draft notices specified by the Secretary for these purposes when
the proposed rule is finalized. These notices could not be modified in any way by health
insurance issuers and would be required to be used to satisfy the proposed notice requirements.
Issuers could include a cover letter with the notices providing additional information, such as
issuer contact information. Attachment 1 is the standard discontinuance notice for the individual
market and for employees in the group market. Attachment 2 the standard discontinuance notice
for employers in the group market. Attachment 3 is the standard renewal notice for the
individual market. Attachment 4 is the standard renewal notice for the group market (which
needs only to be sent to employers).
States would have the option of developing State-required notices for issuers to use in place of
the Federal notices. State notices must be reviewed and approved by CMS before they may be
used by issuers in the State. Once the State notices are approved for use, they cannot be modified
in any way by issuers.
3
We are requesting comments on the draft notices contained in this bulletin. Comments must be
submitted by April 18, 2014 and may be submitted electronically to:
Where to get more information:
The regulations cited in this bulletin are found in Parts 146, 147, and 148 of Title 45 of the Code
of Federal Regulations (45 CFR §§ 146.152, 147.106 and 148.122). Information about on private
health insurance is also available on the CMS website at www.cms.gov/cciio and information on
health reform is available at www.HealthCare.gov.
If you have any questions regarding the guaranteed renewability provisions in this bulletin,
please e-mail CCIIO at [email protected].
4
Attachment 1
This notice must be used when a health insurance issuer elects to discontinue offering a
particular health insurance product in the individual market, and for notification of
employees when discontinuing coverage in the small group or large group market in a
State, consistent with 45 CFR 146.152, 147.106 and 148.122, as applicable.
Important Notice: You Need to Choose a New Health Policy
We Are Discontinuing Your Policy
Dear Member,
We are writing to inform you that we have decided your health insurance policy will not be
available after your current policy year expires. As a result, your current policy cannot be
renewed. Although we will discontinue your policy at its expiration date, you can enroll in other
policies and potentially qualify for financial assistance.
What Do I Need To Do?
To ensure that you do not have a break in coverage, you must enroll in a new policy on or
before the 15
th
day of the last month of your current policy. If you wait until after the 15
th
day of the last month to enroll in a new policy, you may experience a break in coverage of one
month or more.
How Do I Choose A New Policy?
You have options and rights for getting quality, affordable health insurance:
• [You can shop for individual market coverage offered through the Health Insurance
Marketplace, where all policies meet certain standards to guarantee health care security,
and where no one who is qualified to purchase coverage through the Marketplace can be
turned away or charged more because of a pre-existing condition. The Marketplace
allows you to choose a private plan that fits your budget and health care needs. You may
also qualify for tax credits or other financial assistance to help you afford health
insurance coverage through the Marketplace.]
1
• [You can also get new health insurance outside the Marketplace.] You can buy a different
individual market plan from us, or from another health insurance company in your state
that serves your area. These plans guarantee certain protections, such as your ability to
buy a plan even if you have a pre-existing condition. [However, financial assistance is not
available outside the Marketplace.]
1
The bracketed language does not apply to the U.S. territories that do not have a Marketplace.
5
You should review your options as soon as possible, because you may have to buy your coverage
within a limited time period. It is important to maintain health insurance coverage, which may be
required in order to comply with Federal law. If you can afford health insurance but decide to go
without it for three months or more in a year, you may have to pay a fee when you file your
taxes.
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.
6
Attachment 2
This notice must be used for notification of employers when a health insurance issuer elects
to discontinue offering a particular health insurance product in the small group or large
group market in a State, consistent with 45 CFR 146.152 and 147.106, as applicable.
Important Notice: You Need to Choose a New Health Policy
We Are Discontinuing Your Policy
Dear Member,
We are writing to inform you that we have decided that your health insurance policy will not be
available after your current policy year expires. As a result, your current policy cannot be
renewed. Although we will discontinue your policy at its expiration date, you can enroll in any of
our other policies for which you are eligible.
What Do I Need To Do?
To ensure that your enrollees do not have a break in coverage, you must enroll in a new policy
on or before the 15
th
day of the last month of your current policy. If you wait until after the
15
th
day of the last month to enroll in a new policy, your enrollees may experience a break in
coverage of one month or more.
How Do I Choose A New Policy?
You have options and rights for getting quality, affordable health insurance:
• [You may shop in the Small Business Options Program (SHOP) Marketplace, where all
policies meet certain standards to 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 condition. The Marketplace allows you to choose a private
plan that fits your budget and health care needs. You may also qualify for tax credits to
help you afford health insurance coverage through the SHOP.]
2
• [You can also get new health insurance outside the Marketplace.] You can buy a different
plan from us, or you can buy a different plan from any other health insurance company in
your state that serves your area. These plans guarantee certain protections, such as your
ability to buy a plan even if you or your employees have a pre-existing condition.
[However, tax credits are not available outside the Marketplace.]
How Can I Learn More?
2
The bracketed language does not apply to the U.S. territories that do not have a Marketplace.
7
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.
8
Attachment 3
This notice must be used when a health insurance issuer elects to renew the health
insurance coverage for products offered in the individual market in a State, consistent with
45 CFR 147.106 and 148.122, as applicable.
Important Notice: Your Health Policy Is Being Renewed
You Don’t Need to Take Any Action to Keep Your Coverage
Dear Member,
We are writing to inform you that your policy is being renewed. At the end of your current
policy year, we will automatically enroll you in the same policy. We may have made some
modifications to the coverage you had last year. Please review the Summary of Benefits and
Coverage for your upcoming plan year to check for any changes. You may wish to choose a
different policy, and may qualify for financial assistance.
What Do I Need To Do?
There is nothing you are required to do. At the end of your current policy year, we will
automatically enroll you in the same policy.
What If I Want To Choose A Different Policy?
If you wish to choose a different policy, simply enroll in the coverage of your preference. To
ensure that you do not have a break in coverage, you must enroll in a new policy on or before the
15
th
day of the last month of your current policy. You have options and rights for getting quality,
affordable health insurance:
• [You may shop in the Health Insurance Marketplace, where all policies meet certain
standards to 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 condition. The Marketplace allows you to choose a private plan that fits your
budget and health care needs. You may also qualify for tax credits or other financial
assistance to help you afford health insurance coverage through the Marketplace.]
3
• [You can also get new health insurance outside the Marketplace.] These plans guarantee
certain protections, such as your ability to buy a plan even if you have a pre-existing
condition. [However, financial assistance is not available outside the Marketplace.]
3
The bracketed language does not apply to the U.S. territories that do not have a Marketplace.
9
• Since your current coverage is not ending, you can only enroll in a new plan during an
open enrollment period or if you qualify for a special enrollment period. Go to
Healthcare.gov or call 1-800-318-2596 to learn the dates of the next open enrollment
period.
• [If you are enrolled in a plan through a Marketplace, you will receive a renewal notice
from your Marketplace with additional information about your Marketplace renewals.]
If you want to buy a new policy, you should review your options as soon as possible, because
you may have to buy your coverage within a limited time period. It is important to maintain
health insurance coverage in order to comply with applicable State and Federal law. If you can
afford health insurance but decide to go without it for three months or more in a year, you may
have to pay a fee when you file your taxes.
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
Attachment 4
This notice must be used when a health insurance issuer elects to renew the health
insurance coverage for products offered in the small group or large group market in a
State, consistent with 45 CFR 146.152 and 147.106, as applicable.
Important Notice: Your Health Policy Is Being Renewed
You Don’t Need to Take Any Action to Keep Your Coverage
Dear Member,
We are writing to inform you that your policy is being renewed. At the end of your current
policy year, we will automatically enroll you in the same policy. We may have made some
modifications to the coverage you had last year. Please review the Summary of Benefits and
Coverage for your upcoming plan year to check for any changes. If you wish to choose a
different policy, you may choose to enroll in one of our other policies or any other coverage
offered in the State for which you are eligible.
What Do I Need To Do?
There is nothing you are required to do. At the end of your current policy year, we will
automatically enroll you in the same policy.
What If I Want To Choose A Different Policy?
If you wish to choose a different policy, simply enroll in the coverage of your preference. To
ensure that your enrollees do not have a break in coverage, you must enroll in a new policy on or
before the 15
th
day of the last month of your current policy. You have options and rights for
getting quality, affordable health insurance:
• [You may shop in the Small Business Health Options Program (SHOP) Marketplace,
where all policies meet certain standards to 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 condition. The Marketplace allows you to choose
a private plan that fits your budget and health care needs. You may also qualify for tax
credits to help you afford health insurance coverage through the Marketplace.]
4
• [You can also get new health insurance outside the Marketplace.] These plans guarantee
certain protections, such as your ability to buy a plan even if you or your enrollees have a
pre-existing condition. [However, tax credits are not available outside the Marketplace.]
4
The bracketed language does not apply to the U.S. territories that do not have a Marketplace.
11
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.
