While many banks and lending institutions have announced extended grace periods on loan payments, health insurance companies have not embraced, as of yet, any extended delay for plan members to make their monthly premium payments. This is the situation even through California Insurance Commissioner Lara requested that the insurance companies provide a 60-day grace period due to the Covid-19 emergency conditions.
Current Grace Periods For Health Insurance Premium Payments
There are a couple of different reasons why health insurance companies may be reluctant to extend a grace period beyond the current 30-day date range. The first reason is California’s expanded Medi-Cal option. If an individual or family has a sudden decrease of income – below 138 percent of the federal poverty level for adults – and they do not have employer sponsored health insurance, they can immediately apply for Medi-Cal and get coverage at no cost.
Secondly, consumers who have purchased health insurance through Covered California have a 90-day conditional grace period. If the plan member fails to make their premium payment after 30 days, the health plan will be terminated. However, within 90 days of the due date, the Covered California consumer can make all the back premium payments and have their policy completely reinstated.
Finally, Covered California has extended the Special Enrollment Period for individuals and families to enroll in a health insurance with the premium tax credit subsidies through the end of June. Even if a household may not be eligible for Medi-Cal, but has had a significant drop of income, they may still be eligible for health insurance with a subsidy to reduce the monthly premium payment.
Small group plans are a little different. Some carriers have intimated they are willing to work with employers on a case-by-case basis. Western Health Advantage in Northern California stated, “[We are] prepared to work with our impacted groups and individual members who may need assistance with making premium payments. It is important that your clients contact our premium billing department at 888.442.2206 to discuss payment alternatives.”
In addition, they announced, “WHA understands the impact of businesses and schools closing during these difficult times and will be as flexible as possible with enrollment rules such as minimum hours, waiting periods, employer contribution changes, and plan downgrades (for employers and individuals). Please email any requests to whasales@westernhealth.com or call 888.499.3198 to discuss changes to enrollment provisions within your policy.”
Dental and vision insurance carriers Premier Access and Avesis (both owned by Guardian) have announced a premium grace period to groups through May 31st. These carriers also announced relaxed enrollment conditions where a full-time employee may have been furloughed or experience reduced hours will still be eligible for coverage.
Other health, dental, and vision carriers may also be offering extending grace periods and relaxed eligibility requirements during the coronavirus covid-19 emergency. Call your agent or carrier for additional details.
Insurance Commissioner Lara Calls for 60-Day Insurance Premium Grace Period Due to COVID-19 Outbreak
SACRAMENTO, Calif. – Insurance Commissioner Ricardo Lara today issued a Notice requesting that all insurance companies provide their policyholders with at least a 60-day grace period to pay insurance premiums. The Commissioner made the request to ensure policies are not cancelled for nonpayment of premium due to the novel coronavirus (COVID-19) public health emergency.
The Notice follows Governor Gavin Newsom’s State of Emergency declaration to make additional resources available, formalize emergency actions already underway across multiple state agencies and departments, and help the state prepare and mitigate against the broader spread of COVID-19. The Commissioner’s Notice is directed to all admitted and non-admitted insurance companies that provide any insurance coverage in California including, life, health, auto, property, casualty, and other types of insurance.
“Now is the time to come together to help consumers weather this unprecedented period of uncertainty, and that includes helping policyholders maintain their insurance coverage if they are unable to pay their premiums,” said Commissioner Lara. “We must do everything we can to ensure that consumers and their families maintain insurance coverage protection during this public health pandemic.”
Commissioner Lara is also requesting that all insurance agents, brokers, and other licensees who accept premium payments on behalf of insurers take steps to ensure that customers have the ability to make prompt insurance payments, if and where possible. This includes alternate methods of payment, such as online payments, to eliminate the need for in-person payment methods in order to protect the health and safety of both workers and customers.