Grace Period Guidance
Grace Periods & Claims for Insureds in the New York State of Health (NYSOH) Receiving Advanced Premium Tax Credits
- Under the Affordable Care Act:
- Insureds receiving Advanced Premium Tax Credits (APTC) who have paid the first month's premium have a 90 day grace period for payment of premiums.
- Plans must pay claims (if otherwise eligible for payment) during the first 30 days of the grace period.
- Plans have the option to either pay or pend claims after the first 30 days of the grace period.
- Plans will not be subject to prompt pay interest/fines for claims pended during days 31-90 of the grace period. Pended claims during those periods cause prompt pay timeframes to be tolled. Plans should use the date of service in determining where a claim falls in the grace period.
- Plans that pend claims must, when a provider submits a claim for services rendered during days 31-90 of the grace period, give written notice to the provider that the claim is pended, and potentially will not be reimbursed by the plan if the insured does not pay outstanding premiums. Notice may be provided electronically. Plans should use standardized reason code language approved by the Department of Financial Services (DFS) to indicate that a claim has fallen into a delinquency phase.
- Providers participating in a plan's network are not allowed to balance bill members during days 31-90 of the grace period.
- Plans must make updated information available to providers regarding an insured's coverage status on a reasonable real time basis. This information must be made available to providers, upon their request, either telephonically or electronically.
- If the premium is paid in full during the grace period, then the plan must pay all pended claims. Claims must be processed automatically without the need for the provider to resubmit the claim.
- If the premium is not paid in full during the grace period, then the insured's policy may be terminated retroactive to one month after the last day premiums were paid and pended claims may be denied. (Retroactive termination may not exceed 61 days.) Plans must, in the denial notice, provide notification to providers that coverage was terminated retroactively.
- In the event of a complaint to the DFS Consumer Assistance Unit (CAU) regarding non-payment of a claim, the plan, in order to toll the prompt pay timeframes, must clearly respond to CAU by addressing, among other things, (1) the APTC status of the policy, and (2) whether the claim was received after the initial 30 days of the grace period. In the event the plan receives a complaint directly from an insured or an authorized representative of the insured regarding non-payment of a claim, the plan should provide this same information to the insured or the insured's authorized representative.
Grace Periods & Claims for Small Group Coverage and for Insureds with Individual Coverage Not Receiving Advanced Premium Tax Credits
- Insureds not receiving advanced premium tax credits who have paid the first month's premium have a 30 day grace period for payment of premiums for coverage inside and outside the NYSOH. If the premium is not paid in full during the grace period, the insurer may terminate the policy retroactively back to the last date premiums were paid.
Partial Payment of Premiums During Grace Period
- Partial payment of premiums will not operate to reset a grace period. A grace period may only be reset if an individual has paid all outstanding premiums.
Premium Payment Threshold in NYSOH
- Plans may implement a premium payment threshold for individual coverage in NYSOH. A premium payment threshold enables an insured to pay less than the full amount of the premium and is intended to cover situations when an insured underpays by a nominal dollar amount (for example, if the insured incorrectly transposes numbers). The threshold should be a minimum of 95% of the insured's portion of the total premium.
- If a plan has implemented a premium payment threshold for the insured's portion of total premium (i.e. 95%) and an insured pays 95% or more of the premium, the grace period is not triggered. However, the insured still owes the plan the underpaid amount. The plan must include the underpaid amount in the next premium bill along with the premium that is due for the month so the insured is made aware of the underpayment. If the insured underpays the next bill, the payment is first applied to the previous month's bill, and the remainder of the payment must be at least 95% of the premium, or the insured will be placed in a grace period.
- If an insured fails to meet the premium payment threshold (i.e. fails to pay at least $95 of a $100 premium) and is placed into a grace period, the insured must pay the entire outstanding premium that is due before the end of the grace period in order to avoid termination of the policy for failure to pay premium.
- Regardless of any preauthorization, payment of the claim may still be dependent upon the payment of premiums by the insured.
- At a minimum, for premium payments in the individual market, plans must accept paper checks, cashier's checks, money orders, electronic funds transfer (EFT), and all general purpose pre-paid debit cards as methods of payment and present all payment method options equally for an insured to select.
- Whether to accept credit card payments is at the plan's discretion.