New rules for limited-duration health insurance policies means changes are on the way for Arkansas Blue Cross and Blue Shield — including the phase out of Essential Blue Freedom (EBF). The federal government has significantly altered how health insurers can offer limited-duration insurance policies, and issued its final rules and guidance for how to proceed.
Short-Term Blue and Essential Blue Freedom — our two limited-duration policies — are not qualified health plans (QHP). As such, without an exemption, individuals enrolled in such plans may be subject to the shared responsibility payment. The new regulations require that insurance companies cap the duration of these policies to less than three months.
Now that the rules are final (81 FR 75316), we would like to outline the changes to our Essential Blue Freedom and Short-Term Blue products.
About Essential Blue Freedom (EBF)
January 31, 2017: The last day we will accept any new EBF applications. The final rule allowed for a transition period through March 2017, but we must allow time to complete the underwriting process.
Arkansas Blue Cross is sympathetic that members with an EBF plan may be making decisions during open enrollment based on the understanding that they can reapply for another EBF policy after March 15, 2017. As a result, Arkansas Blue Cross will communicate a one-time option to our existing EBF members whose policies are scheduled to terminate after March 15, 2017. These members will have the opportunity to reapply for a new EBF policy that will provide coverage through December 31, 2017. These letters are scheduled to go out in January.
Example: A member enrolled in an EBF policy effective October 1, 2016. This policy is scheduled to terminate September 29, 2017. If the member wants to reapply for a new EBF policy through the end of 2017, we’re allowing for an early opportunity to reapply. This new policy would terminate on December 31, 2017.
March 15, 2017: The last available effective date for any new or “reapply” EBF reapplication.
December 15, 2017: Last date for EBF members to enroll in a QHP to avoid a gap in coverage.
December 31, 2017: All EBF policies will have a final term date of December 31, 2017.
January 1-31, 2018: Former EBF members will still have an opportunity to enroll in a 2018 QHP, but like all applications received in the month of January, the effective date will depend on when we receive the application.
Remember! If an EBF member has their policy terminate outside of an open enrollment period, loss of the EBF policy does NOT count as loss of minimum essential coverage and, therefore, does not trigger a special enrollment period.
About Short-Term Blue
Effective April 1, 2017, the maximum policy length will change from 182 days to 88 days. The minimum policy length will remain 30 days.