How long is the grace period?
If, when policy cancels, do I owe the premium?
If I don’t pay the premium, will it have negative effects?
Cancellation for non-payment of premium:
When premiums are not paid, coverage will cancelled due to non-payment following our standard grace period rules (see below). Members will receive a notice when premium is past due. The notice includes the date when the grace period ends and that coverage will terminate unless the member sends the full past due amount before the grace period ends. Reinstatement is not allowed if the policy is cancelled for nonpayment.
The grace period is an additional period of time during which coverage remains in effect and refers to either:
The three month grace period required for individuals receiving Advance Payments of the Premium Tax Credit
For individuals not receiving the APTC it refers to any other applicable grace period (All States except Maine:
31 days; Maine: 30 days).
If the full amount of the premium is not paid by the premium due date, the grace period begins. If the required premium is not paid by the end of the grace period, coverage is terminated. The member is not be eligible to apply for other coverage until the next open enrollment period unless they experience a qualifying event. See below for specific information about the two types of grace periods.
Grace period for members receiving Advanced Premium Tax Credits (APTC)
Members who receive APTC are provided with a three month grace period.
During the first month of the three month grace period, coverage remains in effect.
During the second and third month of the grace period coverage will be suspended and the member(s) will be ineligible for benefits under their health benefit plan unless they pay all premiums due before the end of the grace period. Any outstanding authorizations, approvals for services or certifications for health care services to be provided during or after the second and third month of the grace period are also suspended. We will not provide any benefits or coverage for services, supplies, or prescription drugs obtained while the suspension is in effect even if previously approved, authorized or certified.
The application of the grace period to claims is based on the date of service and not on the date the claim was submitted.
If full premium is not received during the grace period, members:
Will have no coverage for claims incurred after the first month of the three month grace period. They are liable for the full cost of any services they receive after the first month of the three month grace period.
May be required by their health care providers to pay for any health care services they need.
Will be liable to us for the premium payment due for the period through the last day of the first month of the three month grace period.
Will be liable to us for any claims payments made for services incurred after the last day of the first month of the three month grace period.
May be required to repay any premium tax credits the government paid on their behalf during the second and third months of the grace period.
If your client makes timely payment of all premiums due before the end of the grace period, coverage will be reinstated, and claims for covered services received during the grace period will be processed.
Grace period for members not receiving APTC
These members have a grace period of 31 days (in all states except Maine which is 30 days). This means if any premium payment
is not paid on or before the date it is due, it may be paid during the 31 (30 in Maine) day grace period. During the grace period,
coverage will stay in force. If the full premium payment is not made during the grace period, coverage will be terminated on the last day of the grace period. They will be liable to us for the premium payment due including those for the grace period, as well as for any claims payments made for services incurred after the grace period. Copied from Blue Cross CONFIDENTIAL agent manual Form 03673MUBENMUB 10/25/16 *
Grace Period & Cancellation Procedure
Child, Sibling Pages & Site Map
- Automatic Premium Payments – Benefits and Advantages
- Grace Periods – How long? Premiums Due? Subsidy Pay Back?
- Out of Country – No $$$
- Pay ALL premiums – even if you lose subsidy
- Paying Back Premiums to get reinstated?
- Reinstatement – Find other coverage?
- Was the cancellation legal? Web Visitor Q & A
Examples of how a three-month grace period works
Copies of emails to clarify the rules:
Let’s say your client entered the grace period and owes premiums for two months. Here’s an example of what can happen:
• During the first month in grace period, your client’s health benefits stay in effect. We will honor claims incurred during this period. Your client must still pay any unpaid premiums, copayments, coinsurance and deductible amounts, as set forth by the health plan. • During the second and third months of the grace period, your client’s coverage will be suspended.
No one on the plan will be eligible for benefits, unless the full amount due is paid before the end of the grace period. During this time, we will not pay for any health care services, supplies or prescriptions, even if they were approved before. Now, let’s say your client pays for one of the two overdue months right away. Doing so will not extend the grace period or delay suspension, as the grace period moves into the second month. Your client will be on the hook for any claims during this time while coverage is suspended, unless the account gets paid in full before the grace period ends. Ultimately, if your client doesn’t pay the remaining amount due by the end of the grace period, we will cancel coverage. We also will refund the partial premium payment made in the second month because it doesn’t cover the full premium owed. We will only honor claims incurred in the first month of the grace period.
Premium payment grace period clarification
Regulations require a 90-day grace period for on-exchange members receiving subsidies for their health plan. For off-exchange members not receiving subsidies, the grace period is 30 days. For a member who is on a 90-day grace period and does not pay 100% of their total premium due, the grace period does not start over.
Example: A member owes $600.00 for their premium for March and April. In April, they pay one month's premium for the month of March. In this scenario, the member is still in their 90-day grace period with 30 days left until they are cancelled. Blue Shield Agent Email 6.7.2016
Here are excerpts various bulletins we've received about Grace Periods under Health Care Reform
New Payments (Covered CA) can be made here. Policies cancelled for NO reason or explanation
In either case, the grace period starts on the date we mail members the first warning notice that their premium is overdue. The letter tells them when their grace period ends. It warns that they will lose their coverage unless they send us the full past due amount before the grace period ends. It says we won’t be able to reinstate them afterward, if their policy gets canceled for not paying premiums. We also send them one or more reminder letters repeating this information, depending on how long their grace period is.
45 CFR § 156.270 - Termination of coverage or enrollment for qualified individuals.
(a)General requirement. A QHP issuer may only terminate enrollment in a QHP through the Exchange as permitted by the Exchange in accordance with § 155.430(b) of this subchapter. (See also § 147.106 of this subchapter for termination of coverage.)
(b)Termination of coverage or enrollment notice requirement. If a QHP issuer terminates an enrollee's coverage or enrollment in a QHP through the Exchange in accordance with § 155.430(b)(2)(i), (ii), or (iii) of this subchapter, the QHP issuer must, promptly and without undue delay:
(1) Provide the enrollee with a notice of termination that includes the termination effective date and reason for termination.
(c)Termination of coverage or enrollment due to non-payment of premium. A QHP issuer must establish a standard policy for the termination of enrollment of enrollees through the Exchange due to non-payment of premium as permitted by the Exchange in § 155.430(b)(2)(ii) of this subchapter. This policy for the termination of enrollment:
(1) Must include the grace period for enrollees receiving advance payments of the premium tax credits as described in paragraph (d) of this section; and
(2) Must be applied uniformly to enrollees in similar circumstances.
(d) Grace period for recipients of advance payments of the premium tax credit. A QHP issuer must provide a grace period of 3 consecutive months for an enrollee, who when failing to timely pay premiums, is receiving advance payments of the premium tax credit. During the grace period, the QHP issuer must:
Note, this must have changed to no longer require that a premium must have been made!
A QHP Qualified Health Plan issuer must provide a grace period of three consecutive months if an enrollee receiving advance payments of the premium tax credit has previously paid at least one full month’s premium during the benefit year. 156.270 pdf *
(1) Pay all appropriate claims for services rendered to the enrollee during the first month of the grace period and may pend claims for services rendered to the enrollee in the second and third months of the grace period;
(2) Notify HHS of such non-payment; and,
(3) Notify providers of the possibility for denied claims when an enrollee is in the second and third months of the grace period.
(1) Continue to collect advance payments of the premium tax credit on behalf of the enrollee from the Department of the Treasury.
(2) Return advance payments of the premium tax credit paid on the behalf of such enrollee for the second and third months of the grace period if the enrollee exhausts the grace period as described in paragraph (g) of this section.
(f)Notice of non-payment of premiums. If an enrollee is delinquent on premium payment, the QHP issuer must provide the enrollee with notice of such payment delinquency.
(g) Exhaustion of grace period. If an enrollee receiving advance payments of the premium tax credit exhausts the 3-month grace period in paragraph (d) of this section without paying all outstanding premiums, subject to a premium payment threshold implemented under § 155.400(g) of this subchapter, if applicable, the QHP issuer must terminate the enrollee's enrollment through the Exchange on the effective date described in § 155.430(d)(4) of this subchapter, provided that the QHP issuer meets the notice requirement specified in paragraph (b) of this section.
See next "paragraph" on our webpage
(b)Termination events -
(i) The Exchange must permit an enrollee to terminate his or her coverage or enrollment in a QHP through the Exchange, including as a result of the enrollee obtaining other minimum essential coverage. To the extent the enrollee has the right to terminate the coverage under applicable State laws, including “free look View OUR webpage” cancellation laws, the enrollee may do so, in accordance with such laws.
(ii) The Exchange must provide an opportunity at the time of plan selection for an enrollee to choose to remain enrolled in a QHP if he or she becomes eligible for other minimum essential coverage and the enrollee does not request termination in accordance with paragraph (b)(1)(i) of this section. If an enrollee does not choose to remain enrolled in a QHP in such a situation, the Exchange must initiate termination of his or her enrollment in the QHP upon completion of the redetermination process specified in § 155.330.
(iii) The Exchange must establish a process to permit individuals, including enrollees' authorized representatives, to report the death of an enrollee for purposes of initiating termination of the enrollee's Exchange enrollment. The Exchange may require the reporting party to submit documentation of the death. Any applicable premium refund, or premium due, must be processed by the deceased enrollee's QHP in accordance with State law.
(A) The enrollee demonstrates to the Exchange that he or she attempted to terminate his or her coverage or enrollment in a QHP and experienced a technical error that did not allow the enrollee to terminate his or her coverage or enrollment through the Exchange, and requests retroactive termination within 60 days after he or she discovered the technical error.
(B) The enrollee demonstrates to the Exchange that his or her enrollment in a QHP through the Exchange was unintentional, inadvertent, or erroneous and was the result of the error or misconduct of an officer, employee, or agent of the Exchange or HHS, its instrumentalities, or a non-Exchange entity providing enrollment assistance or conducting enrollment activities. Such enrollee must request cancellation within 60 days of discovering the unintentional, inadvertent, or erroneous enrollment. For purposes of this paragraph (b)(1)(iv)(B), misconduct includes the failure to comply with applicable standards under this part, part 156 of this subchapter, or other applicable Federal or State requirements as determined by the Exchange.
(C) The enrollee demonstrates to the Exchange that he or she was enrolled in a QHP without his or her knowledge or consent by any third party, including third parties who have no connection with the Exchange, and requests cancellation within 60 days of discovering of the enrollment.
(ii) Non-payment of premiums for coverage of the enrollee, and
(A) The exhaustion of the 3-month grace period, as described in § 156.270(d) and (g) of this subchapter, required for enrollees, who when first failing to timely pay premiums, are receiving advance payments of the premium tax credit.
(B) Any other grace period not described in paragraph (b)(2)(ii)(A) of this section has been exhausted;
(iii) The enrollee's coverage is rescinded in accordance with § 147.128 of this subchapter, after a QHP issuer demonstrates, to the reasonable satisfaction of the Exchange, if required by the Exchange, that the rescission is appropriate;
(iv) The QHP terminates or is decertified as described in § 155.1080; or
(c)Termination of coverage or enrollment tracking and approval. The Exchange must -
(3) Require QHP issuers to make reasonable accommodations for all individuals with disabilities (as defined by the Americans with Disabilities Act) before terminating enrollment of such individuals through the Exchange; and
(4) Retain records in order to facilitate audit functions.
(d)Effective dates for termination of coverage or enrollment.
(1) For purposes of this section -
(i) Reasonable notice is defined as at least fourteen days before the requested effective date of termination; and
(iv) If an Exchange does not require an earlier termination date in accordance with paragraph (d)(2)(iii) of this section, at the option of the QHP issuer, on a date on or after the termination is requested by the enrollee that is less than 14 days after the termination is requested by theenrollee, if the enrollee requests an earlier termination date; or
(v) At the option of the Exchange, for an individual who is newly determined eligible for Medicaid, CHIP, or the Basic Health Program, if a Basic Health Program is operating in the service area of the Exchange, the day before the enrollee's date of eligibility for Medicaid, CHIP, or the Basic Health Program.
(3) In the case of a termination in accordance with paragraph (b)(2)(i) of this section, the last day of enrollment in a QHP through the Exchange is the last day of eligibility, as described in § 155.330(f), unless the individual requests an earlier termination effective date per paragraph (b)(1) of this section.
(4) In the case of a termination in accordance with paragraph (b)(2)(ii)(A) of this section, the last day of enrollment in a QHP through the Exchange will be the last day of the first month of the 3-month grace period.
(5) In the case of a termination in accordance with paragraph (b)(2)(ii)(B) of this section, the last day of enrollment in a QHP through the Exchange should be consistent with existing State laws regarding grace periods.
(6) In the case of a termination in accordance with paragraph (b)(2)(v) of this section, the last day of coverage in an enrollee's prior QHP is the day before the effective date of coverage in his or her new QHP, including any retroactive enrollments effectuated under § 155.420(b)(2)(iii).
(8) In cases of retroactive termination dates, the Exchange will ensure that appropriate actions are taken to make necessary adjustments to advance payments of the premium tax credit, cost-sharing reductions, premiums, claims, and user fees.
(9) In case of a retroactive termination in accordance with paragraph (b)(1)(iv)(A) of this section, the termination date will be no sooner than 14 days after the date that the enrollee can demonstrate he or she contacted the Exchange to terminate his or her coverage or enrollment through the Exchange, unless the issuer agrees to an earlier effective date as set forth in paragraph (d)(2)(iii) of this section.
(10) In case of a retroactive cancellation or termination in accordance with paragraph (b)(1)(iv)(B) or (C) of this section, the cancellation date or termination date will be the original coverage effective date or a later date, as determined appropriate by the Exchange, based on the circumstances of the cancellation or termination.
(11) In the case of cancellation in accordance with paragraph (b)(2)(vi) of this section, the Exchange may cancel the enrollee's enrollment upon its determination that the enrollment was performed without the enrollee's knowledge or consent and following reasonable notice to theenrollee (where possible). The termination date will be the original coverage effective date.
(12) In the case of retroactive cancellations or terminations in accordance with paragraphs (b)(1)(iv)(A), (B) and (C) of this section, such terminations or cancellations for the preceding coverage year must be initiated within a timeframe established by the Exchange based on a balance of operational needs and consumer protection. This timeframe will not apply to cases adjudicated through the appeals process.
(1)Termination. A termination is an action taken after a coverage effective date that ends an enrollee's enrollment through the Exchange for a date after the original coverage effective date, resulting in a period during which the individual was enrolled in coverage through the Exchange.
(2)Cancellation. A cancellation is specific type of termination action that ends a qualified individual's enrollment through the Exchange on the date such enrollment became effective resulting in enrollment through the Exchange never having been effective.