QHP – Billing, Grace Periods, and Termination

Premium Billing & Payments

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:

• for certain Special Enrollment Periods that allow for retroactive coverage (see this article for details); and
• for coverage starting January 1, when HSRI has flexibility to set alternative payment deadlines.

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.

Example 1
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).  

Payment Options

Payments to HSRI may be paid by:

• Check of Money Order by mail to HealthSource RI, P.O. Box 9711, Providence, RI 02940-9711 (including the stub from the appropriate invoice greatly reduces the odds of a processing mistake).
• One-time and recurring ACH (e-check), set up through the enrollee’s HSRI online account.
• Bringing a check to the HSRI contact center (at 70 Royal Little Drive, Providence, RI 02904)
• Paying the insurance company directly (but HSRI “discourages” this payment option, as it greatly increases processing time and some insurance carriers do not accept payment directly).

Late Payments & Grace Periods

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

Example 2
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.

Example 3
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.

Termination

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:

• The enrollee is no longer eligible for coverage through HSRI;
• Non-payment of premiums, after exhaustion of applicable grace periods;
• The QHP itself (the plan being offered by the insurance carrier) terminates or is decertified (disallowed from being offered through HSRI);
• The enrollee changes from one QHP to another during a special enrollment period.

An enrollee may also voluntarily terminate her coverage at any time.

Effective Dates of Termination

• Voluntary Termination – Voluntary terminations can effective no sooner than 14 days following the termination request.  This means that coverage must be terminated in advance.  Voluntary terminations are also only effective as of the last day of a month.
• Loss of Eligibility – Terminations following a loss of eligibility are effective on the last day of the month during which HSRI sends the notice of the changed eligibility determination.  (In the case of death of an enrollee, the termination is effective as of the date of death, with the premium for the partial month of coverage prorated based on a 30-day month.)
• Failure to Pay – Terminations following the nonpayment of premiums are effective as of the end of the month during which the 30th day of the grace period falls.  Effectively, this means that a non-paying enrollee may receive their last month of coverage without paying for it (though the enrollee will remain liable for that debt).  For APTC recipients subject to the 90-day grace period, the termination will not officially occur until the conclusion of the 90 days, but the effective date of the termination will be retroactive to the end of the first month of the period.

Example 4
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.

More Resources

• R.I. General Laws § 27-18-3 (regarding 30-day grace period for non-APTC recipients)
• 45 C.F.R. § 155.430 (federal regulation on termination of QHP coverage)
• 45 C.F.R. § 156.270 (federal regulation on termination and grace periods)
• HSRI Draft Policy and Procedure Manual (Chapter 12)