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Dear HIX: What if a payment is late?

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Many Patient Protection and Affordable Care Act (PPACA) health insurance exchange (HIX) agencies have started posting answers to questions from insurers, brokers and the general public on their websites.

Managers of the Nevada Silver State Exchange have added a set of answers to carrier questions to the Q-and-A supply.

PPACA requires states and the U.S. Department of Health and Human Services (HHS) to set up exchanges, or Web-based health insurance supermarkets, in all 50 states and the District of Columbia by Oct. 1.

Nevada is setting up its own exchange and lining up insurers willing to provide the “qualified health plans” (QHPs) to be sold through its exchange.

Carrier representatives asked about topics such as the mechanics of how premiums will get from the customers to the exchanges; how someone will verify whether applicants for various types of plans are eligible for the coverage they are seeking; and what will happen when something goes wrong.

Carriers asked, for example, how customers will pay any “per member, per month” (PMPM) fees that they must pay.

“The exchange will deduct the PMPM fee from the premium payment before sending  payment to the carrier,” exchange managers said. “All exchange PMPM fees must be built into QHP rates.”

That answer holds both for individual plan rates and for the Small Business Health Options Program (SHOP) small-group rates, managers said.

Carriers also asked about customers who fail to pay their premiums, or fail to pay as much as they are supposed to pay, by the end of the grace period.

QHPs cannot reinstate individuals who are getting advanced premium tax credits (APTCs) and fail to make their share of the payments by the end of the grace period, managers said.

“Individuals not receiving APTC and SHOP employers may request reinstatement once per 12 month period,” managers said. “Requests for reinstatement must be received within 15 days of the date of the initial termination warning notice sent by the exchange. Reinstatement will only be granted if full payment of all outstanding balances is received within 15 days of the notice date.”

If a customer sends in a payment that is only a penny short of the required amount, the QHP still must terminate the coverage, managers said.”

“The exchange has discussed the potential of setting a threshold of acceptable payment (90 percent) where the remaining premium could be paid in the subsequent month, however, the delinquency process must be initiated if the premium is not paid in full,” the managers said.  ”Additional feedback from the carriers on this topic is welcome.”

In questions about applicants with children, exchange managers said an adult need not provide documentation of the identity of a child who happens to have a different last name.

An applicant also need not provide extra documentation if the applicant is claiming to be the parent of a child who is more than 45 years younger than the applicant, managers said.

Some carriers asked SHOP enrollees that start with fewer than 50 employees, then grow beyond the SHOP program’s 50-employee cut-off.

Employers that sign up for SHOP coverage when they are small, then grow, can continue to use the SHOP exchange, managers said.

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