Paying your premiums on time
In my role as healthcare coverage evangelist, there remain too many topics that, to my great dismay, are still relevant. One of the most important is:
PAY YOUR HEALTH INSURANCE PREMIUMS ON TIME
The obvious beauty of having coverage through an employer is that the employer subsidizes the coverage. Another beautiful aspect of group coverage is that your contribution comes out of your paycheck. Finally, when an employer offers group coverage, they’ve worked to select the Plan and budget funds to pay for that benefit.
The obvious beauty of having coverage through an employer is that the employer subsidizes the coverage. Another beautiful aspect of group coverage is that your contribution comes out of your paycheck. Finally, when an employer offers group coverage, they’ve worked to select the Plan and budget funds to pay for that benefit.
Most of us, quite inevitably, end up at some time paying premiums directly.
We at Healthcare Navigation recommend that when you must pay for coverage yourself, you set up an automatic draft from your banking account or, if possible, charge it to a credit card. Sometimes this isn’t possible with a first payment because the insurer wants a check, but ongoing automatic payment is an issue that should be addressed with all subsequent payments.
WHY DO WE RECOMMEND AUTOMATIC PAYMENT?
Because we have seen every type of coverage cancelled for non-payment – individual, small group, COBRA, Medicare Part B, Medicare Part D, Medicare supplements, long term care, etc.
WHAT ARE THE REASONS FOR NON-PAYMENT?
I didn’t receive the bill; this was my spouse’s or my parent’s or my daughter’s responsibility; my spouse pays all the bills and is ill; we were traveling; our mail wasn’t forwarded; we moved and our mail wasn’t forwarded; we moved and mail forwarding expired; I found the bill in a stack of mail that wasn’t yet opened; I think I threw it out; etc., etc., etc.
WHAT ARE THE CONSEQUENCES OF NON-PAYMENT?
They can be absolutely dire. If payment is late and you miss a grace period (typically 31 days for private plans) your coverage can be cancelled, and you may not be able to obtain coverage until a subsequent enrollment period with coverage effective the following January 1st. State Insurance Departments will not help you become reinstated if coverage has lapsed due to non-payment. In some states, if a Medicare supplement is cancelled, you can’t reapply without being subjected to medical underwriting and if the insurer doesn’t want you due to pre-existing conditions, they can deny your application.
Some individual policies now state that they reserve the right to collect unpaid premiums for a prior year after a lapse in coverage before you are allowed to enroll in a new plan during annual open enrollment. We’re not sure that is enforceable but it’s an effective tactic to encourage you to select a plan from another company. And the message is pretty clear – the insurer doesn’t want you.
WHAT TO DO IF COVERAGE IS TERMINATED?
Try to pay the late premiums and hope the insurer accepts them and you are reinstated. If that doesn’t work, artful begging is the best approach with a promise to set up automatic payment. You may need to ask for a supervisor because you are typically asking for an exception that insurers are unenthusiastic to make.
WHAT ELSE?
BE AWARE OF THE DATE YOUR COVERAGE RENEWS
This is a different issue than paying premiums timely but both scenarios can end in the same result – being uninsured. This is often January 1st and is always January 1st for individual insurance products or Medicare Part D products. If the coverage you have doesn’t renew and the insurer is not auto-enrolling you in something else, you have to act to obtain alternative coverage and then make sure ongoing payments are set up. If you do not act, it’s possible you could end up with a gap in coverage.
SUMMARY
Remember that insurance rules can be harsh and unforgiving with respect to deadlines for enrollment and for payment. If you are getting a monthly bill for any type of coverage, consider setting it up for some form of automatic payment. Long term care policies request a second contact if payment is late. They obviously do that for a reason. Please do not be at risk for a policy lapsing because a bill got buried or lost or thrown out. The protection health insurance offers is just too important to lose because of a late payment.
