Health Insurance Grace Periods Differ for Those Who Get Government Subsidies
- Insureds who do not get a government premium subsidy have a 31-day grace period for making payments
- Insureds who get a government premium subsidy have a three-month grace period
In either case, the grace period starts on the date the insurer mails 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 the full past due amount before the grace period ends. It says the insurer won't be able to reinstate them afterward if their policy gets canceled for not paying premiums. Insurers also send one or more reminder letters repeating this information, depending on how long the grace period is.
Full payment is required to keep coverage in force
If you find yourself in a grace period situation, make sure to understand that making partial payments on the debt will not serve to extend the coverage period, stretch out the grace period or delay cancelation. After you're notified about premiums overdue, you must pay the full amount owed before the grace period ends to avoid losing your coverage.
Here's an example of how a three-month grace period works. Let's say you entered the grace period and owe premiums for two months. Here's an example of what can happen:
- During the first month in grace period, your health benefits stay in effect. Your insurer will honor claims incurred during this period. You 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 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, insurers will not pay for any health care services, supplies or prescriptions, even if they were approved before.
- Now, let's say you pay 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. You 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 you don't pay the remaining amount due by the end of the grace period, your insurer will cancel your coverage. They also will refund the partial premium payment made in the second month because it doesnâ€™t cover the full premium owed. Your insurer will only honor claims incurred in the first month of the grace period.
Consequences of Cancelation
You need to know that cancelation for not paying premiums can have serious consequences. Here's what happens if you lose your coverage:
- You will still owe unpaid premiums for the first month of your grace period
- You will still owe providers for any health care services you received during the second and third months of the grace period
- You will have to repay any premium tax credits the government paid on your behalf during the second and third months of the grace period
- You wonâ€™t be able to get new coverage for yourself or your dependents until the next open enrollment period, unless a life event triggers a special enrollment period
Insurers understand how difficult situations like this can be. They're willing to work with members to help them, and offer the following options to help make payments easier:
- Pay Online — you can go to your insurer's website, log into your account and click on the Pay My Bill Online link
- Pay By Mail — you can mail their invoice with payment. You must mail in time for it to arrive on or before the last day of the grace period
- Pay By Phone — you can call the number on the back of your member ID card to pay by credit card or check.