On December 19, 2013 the Department of Health and Human Services (HHS) announced two options for those whose policies had been canceled because they did not comply with the reforms required by the Affordable Care Act.  Previously, the Obama Administration allowed insurers to renew existing health plans that did not comply with the ACA for one more year, but many states did not elect that transitional relief.

Now, an individual whose individual market policy was canceled will be eligible for a hardship exemption from the individual mandate and may be allowed to purchase catastrophic coverage.  The catastrophic coverage is allowed if the other plan options in the Exchange are more expensive than the cancelled policy, and catastrophic coverage is available in that individual’s area.