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Government Delays Deadline for Finalizing Health Care Plans

Insurance agreements put on hold (August 28)

According to an exclusive report from Reuters, the Obama administration has delayed a crucial step in the launch of the Patient Protection and Affordable Care Act (PPACA) — the signing of final agreements with insurance plans to be sold on federal health-insurance exchanges beginning October 1.

The Department of Health and Human Services notified insurance companies on Aug. 27 that it would not sign final agreements with the plans between September 5 and 9, as originally anticipated, but would wait until mid-September, according to insurance industry sources.

The reason for the delay was unclear. Sources attributed it to problems involving the display of insurance products within the federal information technology system.

The PPACA is expected to extend federally subsidized health coverage to an estimated 7 million uninsured Americans in 2014 through the online marketplaces. But insurance plans must be qualified to meet specific standards if they are to be sold on the exchanges. And each insurer must sign a contract with the federal government.

The new timetable for qualified plan agreements is the latest in a series of delays for the new health care law, Reuters points out. The most significant came in July when the White House and the Treasury Department announced a 1-year delay in a major PPACA provision that would have required employers with at least 50 full-time workers to provide health insurance or pay a penalty beginning in 2014.

Source: Reuters; August 28, 2013.

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