A grace period is a short period of time a consumer may be given to pay his or her health insurance plan premium after the due date has passed. Consumers receiving advance payments of the premium tax credit (APTC) who have paid at least their first month’s premium in full are entitled to a grace period of three consecutive months that begins the month that they first miss a premium payment. CMS recently released guidance, REVISED Bulletin 10: Guidance on Grace Periods in the FFM that describes how grace periods interact with the renewal and re-enrollment process for the 2015 benefit year. Specifically, the guidance applies to consumers currently enrolled in a Marketplace plan who are in a grace period spanning two benefit years (e.g., 2014-15), and whose grace period takes place during Open Enrollment. An expired grace period that results in terminated 2014 coverage affects consumers’ 2015 enrollment differently based on whether the 2015 plan is a renewal or a re-enrollment into a different product. Note that the term “renewal” applies if a consumer’s 2015 enrollment is in a plan within the same 2014 product. Plans that are within the same product have Plan IDs beginning with the same first ten characters. The term “re-enrollment into a different product” applies when a consumer selects a plan for 2015 that starts with a different ten character sequence than his or her 2014 plan. (For more information on how consumers can find their plan IDs, please see, “How do I find my plan ID?” on HealthCare.gov.)
- If consumers actively enroll or are automatically re-enrolled into a plan within the same product as their 2014 plan during a grace period that begins in 2014 and extends through 2015, they will be enrolled for 2015 coverage. However, the issuer may attribute new payments received to the outstanding debt from the 2014 grace period.
- If consumers actively enroll or are automatically re-enrolled in a plan within a different product during a grace period that begins in 2014 and extends through 2015, the issuer must accept the enrollment, and cannot apply any enrollee payments for the new coverage to outstanding debt from any previous coverage. However, like other enrollees, these consumers will be required to pay the first month’s premium of the new plan in order to have coverage effectuated.
- If consumers actively re-enroll or are auto re-enrolled into a plan within the same product and if consumers’ grace periods end on December 31, 2014 and they have not paid their outstanding premiums, the issuer can accept or reject their auto renewal or active renewals. In these cases, the issuer must apply the same policy to all enrollees and cannot discriminate based on health status or other prohibited bases. However, if these consumers choose a different product and/or a different issuer, the issuer must accept the enrollment and cannot apply any enrollee payments for the new coverage to outstanding debt from any previous coverage.
- Active renewals or auto renewals (into the same product) do not necessarily require that the consumer pay a full month’s premium to maintain coverage since renewed coverage is considered previously effectuated. Rather, any nonpayment for a renewal is subject to the applicable grace period and triggers termination for nonpayment only if the grace period has expired. For example, if a consumer’s grace period began on December 1, 2014 and he or she actively renews coverage or is auto re-enrolled into a plan of the same product, coverage will continue even without a premium payment for January until the grace period ends at the end of February 2015, when coverage would end retroactive to the last day of December 2014 if the consumer has not paid his or her premiums for December, January, and February.
Termination for Non-Payment of Premiums If consumers’ grace periods span the 2014 and 2015 coverage years, and they are auto re-enrolled or actively renew their coverage but do not pay their premiums, the original coverage and the renewed coverage will end retroactive to the last day of the first month of the grace period. If the Open Enrollment Period is still ongoing, consumers may come back and actively enroll in a plan offered by the same issuer (even of the same product) under guaranteed availability rules, paying the first month’s premium to effectuate coverage without the issuer applying the payment to previous debt. If coverage is terminated after the end of Open Enrollment, however, consumers will not be able to enroll in a new Marketplace plan unless they qualify for a special enrollment period. Please remind consumers who re-enroll in coverage during a grace period that they must pay their premiums for their coverage to continue. As a reminder, consumers whose 2014 coverage ended because they did not pay their premiums can select 2015 Marketplace coverage. Additionally, consumers in this situation can select plans from the same health insurance company that terminated their 2014 coverage if they choose, and the health insurance company cannot use their premium payments to cover outstanding debt.
Summary of Auto Re-Enrollment, Active Re-Enrollment, and Choosing a Different Marketplace Product for Consumers Whose Grace Periods Span Coverage Years (2014-2015)
To view the assister tip sheet that includes information about grace period eligibility, click here: http://marketplace.cms.gov/technical-assistance-resources/helping-consumers-grace-period.pdf.