This article describes the policies of HealthSource RI (HSRI) with respect to premium billing and collection, grace periods applied to late payments, and termination from coverage. This article is limited to describing individual market policies.
HSRI handles all billing and premium collection on behalf of the insurance companies who offer qualified health plans (QHPs) through HSRI. Enrollees pay their premiums to HSRI, and HSRI then forwards bundles of payments to the insurers.
HSRI invoices for coverage in a particular month are generally due to be paid on or before the 23rd of the prior month. Exceptions arise:
Putting the exceptions aside, payments for a coverage month received by HSRI after the 23rd of the prior month are late.
Invoices also tend to be generated and mailed (and/or placed into online accounts) at the end of the month before the month in which the payment is due.
Consider a payment for April coverage. The payment will be due on March 23rd, and the invoice will be generated and sent to the enrollee around the end of February (or very early March).
Payments to HSRI may be paid by:
Payment received after the 23rd of the month before the coverage month are considered late, but all enrollees have access to grace periods. The grace period differ depending on whether the enrollee is receiving advanced premium tax credits (APTCs).
Grace Period for non-APTC Recipients
For an enrollee who is not receiving APTCs, the grace period is 30 days.
Grace Period for APTC Recipients
For an enrollee who is receiving APTCs, the grace period is 90 days. During the first 30 days of the grace period, coverage resumes as normal. During days 31-90, coverage is “pended.” This means that the insurance company can stop paying for medical services. In effect, the enrollee is uninsured during days 31-90 of the grace period, though she can get covered again (without waiting for open enrollment) by paying all past-due premiums
Stuart is an APTC recipient. He received an invoice on February 3rd to pay for his March coverage. The invoice was due on February 23rd, but he missed the payment. On March 23rd, Stuart’s coverage will be placed into “pend” status. But if he pays all past-due amounts by May 23rd, then he can remain covered. (If he does not pay before that deadline, then his coverage will be terminated, as discussed below.)
Processing of Late Payments
All payments are applied first to the oldest outstanding bills on the account. This means that, for example, if an enrollee is renewing coverage but has outstanding bills from the prior year, the new payments will first be applied to the prior year.
Consider Stuart from example 2 above. His premium (after considering the APTCs) was $100 per month. On April 5th, he makes a payment of $250. He hopes that this premium will cover him for April and May, and that the extra $50 will start to pay off his old debt from March coverage.
→ Stuart’s payments will not be applied as he hopes. Payments are first applied to the oldest unpaid months. This $250 will cover his March and April coverage, and $50 will be applied towards May. (The invoice for May will have already been issued by April 5.) If he fails to make another $50 payment before April 23rd, he will again be considered late in paying for his May coverage.
HSRI handles all terminations from coverage. Insurance carriers may not, under any circumstances, terminate the coverage of QHP enrollees. (If an insurer believes that an enrollee’s coverage should be terminated, it can inform HSRI, but it must abide by HSRI’s decision.)
HSRI will terminate a QHP enrollee’s coverage in the following circumstances:
An enrollee may also voluntarily terminate her coverage at any time.
Effective Dates of Termination
Consider again Stuart from example 2, who stopped making payments before paying for his March coverage. Instead of making any payments (as discussed in example 3), Stuart fails to make any payments at all.
→ Stuart’s coverage will terminate effective March 31, the end of the first month of the grace period, even though the official termination will not be processed until the end of his “pend” period on May 23rd.
Author: Sam Salganik
Date: August 11, 2015