2020 Plan Year Announcements from CMS on Grandmothered Plans and AV Calculator
Although we are pleased with the additional year of transition relief
for grandmothered plans, NAHU recognizes that a longer-term solution
needs to be put in place...
Earlier this week CMS released guidance allowing states to determine whether to allow the renewal “grandmothered” policies for plan year 2020. This follows similar announcements that the Obama and Trump administrations have made since November of 2013. In that time, a majority of states – 32 to be exact – have allowed for grandmothered plans to continue to be renewed under this transitional relief.
Although we are pleased with the additional year of transition relief for grandmothered plans, NAHU recognizes that a longer-term solution needs to be put in place and that annual renewal of this option does not allow employers to adequately plan their benefit structures. Unfortunately, annual guidance on this and many other requirements has become the “new normal” under both the Obama and Trump administrations which leads to further consumer frustration.
In other highly anticipated CMS news, the actuarial value calculator (available here) and methodology for plan year 2020 was released. The ACA generally requires issuers of non-grandfathered health insurance plans offered in the individual and small group markets, both inside and outside of the Affordable Insurance Exchanges, to use AV calculator for the purposes of determining levels of coverage. The ACA stipulates that AV be calculated based on the provision of essential health benefits to a standard population. The law groups health plans into four tiers: bronze, with an AV of 60 percent; silver, with an AV of 70 percent; gold, with an AV of 80 percent; and platinum, with an AV of 90 percent.