This post has been updated.
California Insurance Commissioner Dave Jones announced Tuesday that Blue Cross Blue Shield California will delay its individual policy cancellations until March 31, 2014, granting policy holders a 90-day extension.
Blue Shield moved its policies from the marketplace regulated by the state’s Department of Insurance to the California Department of Managed Health Care marketplace because the insurance department didn’t approve Blue Shield’s 2014 plans, according to Politico. Since Blue Shield left the market, it needed to give consumers 180 days notice.
Jones clarified in his statement that if those police holders want to take advantage of government subsidies, in particular through the Affordable Care Act, they should choose a new plan by Dec. 15.
Blue Shield spokesman Steve Shivinsky told the San Francisco Business Times that California had threatened to sue the company if it did not delay cancellations after a disagreement over the insurer’s original 90 day notice to customers.
“We had a disagreement with the state over the 90 day notice we gave to … policyholders and we were faced with a lawsuit if we did not agree to their requirement for the 90 day extension,” Shivinsky said.
Shivinsky said the delay could force consumers to pay two deductibles in 2014 or cause some to miss out on government subsidies for policies found in the federal health insurance exchange.