Behind On Premium Payments
Life presents challenges for individuals and families that can unfortunately result in overdue health insurance payments. However, it doesn’t have to mean losing coverage or creating barriers to healthcare. One of the key benefits of ACA-sponsored Health Insurance Marketplace plans is grace periods, and it’s crucial to understand what these are and how they work in case financial hardship occurs.
Even if a payment is already missed, coverage often doesn’t end right away. With the right information and support, it’s possible to avoid gaps in care and reduce the stress that can come with financial uncertainty.
49% of uninsured adults have difficulty affording healthcare1
62% of uninsured adults report having healthcare debt1
Reference: 1. Kaiser Family Foundation. Key Facts about the Uninsured Population. Published December 18, 2024.
What Happens When a Monthly Premium Is Missed?
Health insurance premiums for Marketplace plans are usually paid monthly at a date determined during signup, and coverage doesn’t end immediately if a payment is missed. To ensure individuals and families have time to catch up and remain covered, the Marketplace offers a short window of time called a grace period.
What Is a Marketplace Grace Period?
A grace period gives people enrolled in a Marketplace health plan a chance to catch up on payments owed while keeping their insurance coverage. For most plans purchased through the Marketplace, the grace period is 90 days. During this time, insured individuals can continue receiving care under their plan.
If all missed payments are paid before the end of the 90-day period, coverage will continue, and pending insurance claims will be processed. The individual will also not be responsible for any care they received within the carrier network, save for co-pays accrued.
To be eligible for a grace period, individuals must qualify for and be receiving the Advance Premium Tax Credit (APTC). They must also have paid at least one full month’s premium during the benefit year. If they do not qualify and pay for the Marketplace plan in full themselves, the grace period is roughly 30 days.
If the due balance is not paid in full after 30 days, the plan may be canceled, and coverage may end retroactively. This means that any care received between now and the last premium payment will not be covered, and the individual will be required to pay the full cost, possibly leading to significant medical debt.
What Are the Options After Coverage Ends?
If health coverage is lost due to non-payment, re-enrollment may not be possible until the next Open Enrollment Period unless a person qualifies for a Special Enrollment Period (SEP). In specific circumstances, individuals may qualify for Medicaid or other assistance programs if they’ve suffered significant loss of income or household changes.
For individuals and families that accrued debts for uncovered care, hospital- and community-based assistance programs may help cover premiums or connect people to new health plans.
FAQs
Does the grace period activate automatically?
For those receiving the Advance Premium Tax Credit, the 90-day grace period automatically kicks in after the first payment due date is missed. Those not receiving the APTC must contact their insurance provider, as state laws and regulations may not require them to automatically activate the grace period.
Is all care covered during the grace period?
If an individual misses a premium payment, it’s crucial they contact their health insurance provider. They can advise on next steps and what in-network treatments and healthcare services will be covered during this period. Typically, the carrier is required to pay claims during the first month, but they may hold claims during the second and third months until outstanding premiums are paid.
What qualifies for a Special Enrollment Period (SEP)?
Life events that may qualify someone for a Special Enrollment Period include:
- Losing coverage through an employer
- Losing Medicare, Medicaid, or Children’s Health Insurance Program (CHIP) coverage
- Changes in household, such as getting married or divorced, having a baby, adopting a child, the death of a family member, or turning 26 and aging off a parent’s plan
- Moving to a new zip code outside of a plan’s service area
- Gaining U.S. citizenship
- Being released from incarceration
Can coverage be reinstated after cancellation?
Will partial payments keep coverage active?
In most cases, the full premium balance must be paid by the end of the grace period. Partial payments will not extend the grace period or prevent plan termination.