HHS tells plans to offer retroactive coverage

December 12, 2013

Even those that don't pay in full could be covered on January 1

According to an announcement released yesterday by the Department of Health and Human Services, insurers should allow individuals who sign up for health insurance plans after the previously set enrollment deadline of December 23 to begin their coverage on January 1 anyway.

Further, HHS also permits insurers to offer retroactive coverage for individuals paying premiums within the month of January. Those who pay a partial premium can still be covered, even when there is a balance due.

Enrollees can now sign up late, pay late and fail to pay in full, and yet still receive full coverage on January 1, if plans follow the HHS recommendations.

The implications for health plans go beyond pure financial burdens. Administering such a variety of billing and collection practices on the fly will create new accounting issues and open up the possibility of mistakes in eligibility determinations at the point of care. Confusion will extend to providers and consumers alike.

Grandfathered network providers

HHS also announced that plans should treat out-of-network providers as in-network to ensure continuity of care for acute episodes, while also grandfathering in a member’s in-network providers at the time of enrollment. Such a move seems to be a response to recent outcry from patient advocates related to significant cutbacks in networks that are planned for early 2014, after open-enrollment season. Advocates maintain that plans such as UnitedHealthcare and Humana are terminating in-network physicians and disrupting care for patients.

While HHS cannot mandate the changes, officials say they are “encouraging” them. However, any member that pays by December 31, 2014, must in fact be covered on January, as per federal rules.

Other steps taken by HHS include giving those enrolled in the federal Pre-existing Condition Insurance Plans (PCIP) the chance to extend their coverage through January 31, 2014, if they haven’t already selected a new plan, and encouraging insurers to refill prescriptions covered under previous plans during January.

Aaron Albright, a CMS spokesperson says the administration wants to make enrollment easier for consumers and those already in the high-risk pools.

“As part of our efforts to smooth the transition to the marketplaces for those seeking coverage that begins in January, we are taking steps to ensure that Americans enrolled in the federal PCIP insurance plan will not face a lapse when the new year begins,” Albright says.