Section 1300.65.3 - Cancellations or Nonrenewals for Nonpayment of Premiums: APTC Enrollee (California Code of Regulations)

§ 1300.65.3. Cancellations or Nonrenewals for Nonpayment of Premiums: APTC Enrollee

(a) General Requirements

(1) Applicability. This section shall apply to all cancellations and nonrenewals for nonpayment of premiums for an enrollee who is receiving the APTC through the PPACA, section 1401 (26 U.S.C. § 36B), pursuant to Health and Safety Code section 1365(a)(1)(A).

(2) Federal Grace Period

(A) To qualify for the federal grace period, as defined in California Code of Regulations, title 28, section 1300.65(a)(8), an APTC enrollee shall have paid at least one full month's premium before the nonpayment of premiums.

(B) The federal grace period begins the first day after the last day of paid coverage and lasts for three full consecutive months.

(C) Notwithstanding California Code of Regulations, title 28, section 1300.65(a)(14), a QHP Issuer may implement a premium payment threshold policy, as defined in California Code of Regulations, title 28, section 1300.65(a)(21).

(D) Upon determining that an APTC enrollee has failed to make a premium payment by the due date, the QHP Issuer shall send a "Notice of Start of Federal Grace Period" to the APTC enrollee, notifying the recipient that a payment delinquency has triggered a 3-month federal grace period starting from the first day after the last day of paid coverage.

(E) The Notice of Start of Federal Grace Period sent to the APTC enrollee shall not be mailed or dated on or before the premium due date for which the APTC enrollee is receiving the Notice. The Notice of Start of Federal Grace Period must be sent on or before the fifth (5th) business day after the start of the federal grace period. However, in the event a QHP Issuer learns of a payment delinquency between the last day of paid coverage and the fifteenth (15th) day of the first month of the federal grace period, due to the discovery of insufficient funds, a rejected credit card payment, or a similar event, the QHP Issuer shall send the Notice of Start of Federal Grace Period within five (5) calendar days of learning of the payment delinquency. A Suspension QHP Issuer that fails to send the Notice of Start of Federal Grace Period by the applicable deadline(s) shall not suspend the APTC enrollee's coverage during the second and third months of the federal grace period.

(3) Suspension of Coverage

(A) Suspension of coverage during months two and three of the federal grace period is optional for the plan.

(B) A Non-Suspension QHP Issuer shall not take or threaten action that causes or suggests that the APTC enrollee's coverage may be suspended. A Non-Suspension QHP Issuer shall:

(i) Provide its APTC enrollees with the 3-month federal grace period,

(ii) Provide coverage to the APTC enrollee as required by the plan contract during the 3-month federal grace period,

(iii) Pay all claims for covered health care services rendered during the 3-month federal grace period, notwithstanding California Code of Regulations, title 28, section 1300.65.3(a)(5)(A), and

(iv) Not hold an APTC enrollee financially responsible for the costs of claims for covered health care services rendered during the 3-month federal grace period, even if cancellation occurs for nonpayment of premium. An APTC enrollee remains responsible for payment of outstanding premiums and any applicable deductibles, copayments, and coinsurance, pursuant to the APTC enrollee's Evidence of Coverage, accrued during the 3-month federal grace period, even if cancellation occurs for nonpayment of premium.

(C) To suspend an enrollee during months two and three of the federal grace period, a Suspension QHP Issuer shall:

(i) Comply with any and all notice requirements to the enrollee related to suspension of coverage;

(ii) Make any necessary system adjustments by day 1 of the second month of the federal grace period to the QHP Issuer's real time eligibility and verification system to accurately reflect the APTC enrollee's suspension of coverage; and

(iii) Reinstate the APTC enrollee, retroactive to the last day of the first month, if the APTC enrollee pays all outstanding premium amounts before the end of the federal grace period.

(D) During the first month of the federal grace period, the Suspension QHP Issuer shall:

(i) Provide coverage to the APTC enrollee as required by the plan contract; and

(ii) If the APTC enrollee does not pay outstanding premium amounts by day 15 of the first month of the federal grace period, the Suspension QHP Issuer shall send a Notice of Suspension to the APTC enrollee, and shall send a separate Notice of Suspension to providers. Both notices shall be sent no earlier than day 16 of the first month of the federal grace period but no later than the end of the first month of the federal grace period.

(E) During months two and three of the federal grace period, the Suspension QHP Issuer shall:

(i) Suspend or pend claims for services rendered to the APTC enrollee; and

(ii) Make any necessary system adjustments by day 1 of the second month of the federal grace period to the Suspension QHP Issuer's real time eligibility and verification system to accurately reflect the APTC enrollee's suspension of coverage. For the purposes of this subdivision, the QHP Issuer shall use only the terms "coverage pending," "coverage suspended," or "inactive pending investigation" so as to clearly communicate the status of the APTC enrollee.

(F) During the suspension of coverage, the APTC enrollee:

(i) Remains responsible for making all delinquent and ongoing premium payments; and

(ii) May submit a grievance pursuant to Health and Safety Code section 1365(b).

(G) The Notice of Suspension shall be given to the APTC enrollee's assigned group, assigned network provider, any provider with an outstanding prior authorization to provide services to the APTC enrollee, and any network provider that submitted claims for the APTC enrollee in the two months prior to the start of the APTC enrollee's federal grace period.

(i) This notice requirement is in addition to the provider's ability to verify APTC enrollee eligibility for coverage with the QHP Issuer.

(ii) This notice requirement does not replace a provider's responsibility to verify eligibility for coverage of an APTC enrollee with the QHP Issuer before providing health care services.

(iii) In the event the Suspension QHP Issuer does not provide the notice to the APTC enrollee's providers or does not update its real time eligibility and verification system by day 1 of the second month of the federal grace period, and providers provide health care services to the APTC enrollee, the Suspension QHP Issuer shall be responsible for paying the claim costs of the APTC enrollee that would have been covered under the plan contract notwithstanding the Suspension of Coverage.

(4) Reinstatement of Coverage

(A) In the event that an APTC enrollee does not pay all outstanding premium amounts before the next premium due date, the QHP Issuer shall bill the APTC enrollee in the same form and manner of billing as if the APTC enrollee were not in the federal grace period, and include in the billing statement the total premium amounts owing at the end of the billing cycle.

(B) Upon payment of all outstanding premium amounts at any time before the expiration of the federal grace period, the QHP Issuer shall reinstate the APTC enrollee's coverage pursuant to the plan contract and immediately update its real time eligibility and verification system to reflect an "active" status.

(C) If an APTC enrollee with coverage through a Suspension QHP Issuer pays all outstanding premium amounts before the end of the federal grace period, the Suspension QHP Issuer shall be liable for the claims covered under the APTC enrollee's Evidence of Coverage less any applicable deductibles, copayments, or coinsurance, from the date of suspension of coverage through the date of reinstatement. The Suspension QHP Issuer shall reimburse the APTC enrollee for any medical expenses incurred pursuant to this subdivision within 30 days of receipt of the complete claim, as defined in California Code of Regulations, title 28, section 1300.71(a)(2).

(5) Cancellation or Nonrenewal Following Federal Grace Period

If the APTC enrollee fails to pay outstanding premium amounts on or before the last day of the federal grace period, the QHP Issuer shall cancel or not renew the APTC enrollee's health care coverage.

(A) The effective date of cancellation for an APTC enrollee canceled or not renewed by a Suspension QHP Issuer or by a Non-Suspension QHP Issuer shall be the day after the last day of the first month of the 3-month federal grace period pursuant to 45 Code of Federal Regulations part 155.430(d)(4).

(B) For the purposes of this section, all plans shall notify an enrollee, subscriber, or group contract holder when the plan has cancelled, rescinded, or not renewed health coverage in one of the following two ways:

(i) Send a written notice of termination to the enrollee, subscriber, or group contract holder, when required pursuant to California Code of Regulations, title 10, section 6506(e)(1). This notice shall include the notice of grievance rights set forth in California Code of Regulations, title 28, section 1300.65.5, and any notice required under Health and Safety Code section 1366.50, or

(ii) Send the Notice of End of Coverage. This Notice shall be sent after the date coverage ends, and no later than five calendar days after the date coverage ended. At a minimum, this Notice shall contain the information set forth in California Code of Regulations, title 28, section 1300.65.3(b)(4).

(b) Notice Requirements

(1) Notice of Start of Federal Grace Period to APTC Enrollee

The Notice of Start of Federal Grace Period to the APTC Enrollee shall comply with all applicable federal and state requirements, and shall include all of the following:

(A) The title "Notice of Start of Federal Grace Period" displayed in 20-point bolded font at the top of the notice;

(B) The name and contact information for the APTC enrollee;

(C) The names of all APTC enrollees affected by the notice;

(D) The date of the notice;

(E) The date of the first day of the federal grace period, expressed as a month, day and year;

(F) The dollar amount past due. This amount shall indicate the amounts owed by month if more than one month is past due;

(G) The date of the last day of paid coverage, expressed as a month, day and year;

(H) The name of the QHP Issuer;

(I) An explanation of the three-month federal grace period and the date the federal grace period expires;

(J) The telephone number for the QHP Issuer's customer service; and

(K) A statement explaining the consequence of losing coverage, including financial responsibility for the payment of claims incurred and the obligations of the subscriber.

(2) Notice of Suspension to APTC Enrollee

The Notice of Suspension to the APTC enrollee shall comply with all applicable federal and state requirements, and shall include all of the following:

(A) The title "Notice of Suspension" displayed in 20-point bolded font at the top of the first page of the notice;

(B) The name and contact information for the APTC enrollee;

(C) The names of all APTC enrollees affected by the notice;

(D) The date of the notice;

(E) A statement indicating the start date of the federal grace period;

(F) The dollar amount past due. This amount shall indicate the amounts owed by month if more than one month is past due;

(G) Date of the last day of paid coverage, expressed as a month, day and year;

(H) The name of the QHP Issuer;

(I) An explanation of the three-month federal grace period and the date the federal grace period expires;

(J) An explanation of the suspension of coverage during the second and third months of the federal grace period and the start and end dates of the suspension of coverage;

(K) An explanation that the APTC enrollee must pay the total outstanding premium in order to exit the federal grace period and prevent coverage from ending;

(L) The telephone number for the QHP Issuer's customer service;

(M) Consequence of losing coverage, including financial responsibility for the payment of claims incurred and the obligations of the APTC enrollee; and

(N) The notice of grievance rights in accordance with Health and Safety Code section 1365(b) and California Code of Regulations, title 28, section 1300.65.5.

(3) Notice of Suspension to APTC Enrollee's Provider(s)

The Notice of Suspension to the APTC Enrollee's Provider(s) shall comply with all applicable federal and state requirements, and shall include all of the following:

(A) The title "Notice of Suspension to APTC Enrollee's Provider" displayed in 20-point bolded font at the top of the notice;

(B) The names of all APTC enrollees affected by the notice;

(C) The date of the notice;

(D) The name of the Suspension QHP Issuer for the APTC enrollee;

(E) An explanation of the suspension of coverage during the second and third months of the federal grace period, and the start and end dates of the suspension of coverage; and

(F) The Suspension QHP Issuer's customer service telephone number for providers.

(4) Notice of End of Coverage

The Notice of End of Coverage shall comply with all applicable federal and state requirements, and shall include all of the following:

(A) The title "Notice of End of Coverage" displayed in 20-point bolded font at the top of the notice;

(B) The name and contact information for the APTC enrollee;

(C) The names of all APTC enrollees affected by the notice;

(D) The date of the notice;

(E) The end of coverage effective date, expressed as a month, day and year;

(F) The reason for end of coverage;

(G) The notice of grievance rights in accordance with Health and Safety Code section 1365(b) and California Code of Regulations, title 28, section 1300.65.5;

(H) Any notice required under Health and Safety Code section 1366.50; and

(I) The following statement: "To learn about new coverage or whether your coverage can be reinstated, contact [health plan] at [contact information]."

(1. New section filed 7-30-2019; operative 10-1-2019 (Register 2019, No. 31).)

Note: Authority cited: Section 1344, Health and Safety Code. Reference: Section 1365, Health and Safety Code; and Code of Federal Regulations, title 45, part 156.270.

Disclaimer: Lawrina makes great effort to keep legal information accurate and updated. However, we cannot guarantee that Section 1300.65.3 Cancellations or Nonrenewals for Nonpayment of Premiums: APTC Enrollee is an exact copy of the official text as updates may have been made. Please check the accuracy of the information provided against the official resources.

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