Frequently Asked Questions
Why is this Emergency Rulemaking being introduced?
This Emergency Rulemaking (ER), which took effect on April 20, 2020, focuses on grace periods and termination of coverage, continuation coverage for employees, and measures to address the impact of a prescription drug shortage.
What does this ER do?
This ER does three things:
- Prevents Termination of Coverage Due to Late Payment of Premiums. Requires issuers of private comprehensive individual or group health insurance coverage, other than group PPO, group non-network coverage, or group voluntary health service plans, to refrain from terminating coverage based on nonpayment of premiums for at least 60 days. Also, the ER extends the first premium payment deadline by 30 days on a new policy of private comprehensive health insurance coverage in the individual market.
- Protects Coverage Options for Furloughed and Terminated Employees. Requires issuers of fully insured group HMO coverage to allow employers to choose to continue covering employees, even if the employees would otherwise be ineligible due to a reduction in hours worked. Requires the issuer to allow employees whose employment-based coverage has been terminated to choose coverage under COBRA or state continuation laws, as long as at least one person remains actively employed by the employer. Requires private comprehensive individual or group health insurance coverage that is not offered on the ACA Health Insurance Marketplace and is not group PPO, group non-network coverage, or group voluntary health service plan to allow persons who have been terminated from their employment-based coverage to get new coverage backdated to the day after they lost their employment-based coverage.
- Protects insureds from Prescription Drug Shortages. Requires issuers of individual or group health insurance coverage to cover an off-formulary drug at the same level as a formulary drug, if the formulary drug is not available due to a drug shortage. Requires coverage of at least a 90-day supply for maintenance medications for individual or group coverage that is not group PPO, group non-network coverage, or group voluntary health service plan.
Does the ER apply to the group health insurance coverage that I get from my employer?
It depends on what policy you have.
For fully insured HMO policies:
If you are covered under a fully insured HMO policy from your employer, then the ER applies wherever it refers to group coverage.
For fully insured PPO policies, health policies without a preferred provider network, or voluntary health service plans:
If your employer covers you under a fully insured PPO policy, a health insurance policy without a preferred provider network, or a voluntary health service plan, then most of the ER does not apply to you. However, your insurance company will be required to cover an off-formulary drug alternative if there is a shortage of a formulary drug, and termination of your coverage based on a reduction in hours worked or lay-off will trigger the special enrollment provision.
For self-insured coverage:
If your employer has provided you self-insured coverage, then the only part of the ER that affects you is the special enrollment provision. Nothing changes for your self-insured coverage, but if you lose that coverage because your working hours were reduced or you were laid off, then any new coverage that you are eligible for that you do not purchase through the ACA Health Insurance Marketplace must allow you to have that new coverage take effect retroactively to the date after you lost your old coverage, subject to other special enrollment period requirements. Please note that, if you do backdate your new non-Marketplace coverage like this, you will be responsible to pay the premiums applicable to the period of coverage that has already passed.
How does the ER address the extension and cancellation of payment deadlines?
The ER allows an insured to request to extend payment deadlines, without interest, for health insurance coverage for at least 60 days from each original premium due date. If you have any questions about how to submit a request to delay your premium payments, contact the company that issued your policy or certificate of coverage. Please bear in mind that, for a short time after April 20, 2020, when the ER was first adopted, your issuer may still be figuring out its own process for you to submit this request.
Additionally, the ER provides that, for insureds who had already failed to make a sufficient premium payment by their policy’s due date but whose coverage had not yet terminated by April 20, 2020, issuers shall refrain from cancelling or nonrenewing their coverage for at least 60 days, which ends at June 19, 2020.
For insured individuals receiving advanced premium tax credits for Qualified Health Plans (QHPs) or stand-alone dental plans (SADP), issuers are to delay initiating the federally mandated 3-month grace period due to failure to pay premiums for 30 days from the missed payment date. A QHP or SADP is an insurance plan that is certified by the ACA Health Insurance Marketplace, provides essential health benefits, follows established limits on cost sharing, and meets other requirements under the Affordable Care Act (ACA).
For QHPs and SADPs sold through the ACA Health Insurance Marketplace, CMS has allowed the extension of payment deadlines as long as the individual is not already in a grace period and as long as the state insurance regulator grants permission.
The ER mandates issuers to extend existing deadlines by 30 days for individuals to make a binder payment for all health insurance coverage in the individual market. A binder payment is the first premium payment that you are required to make to secure new coverage.
Does this ER address issuer communication with consumers regarding grace periods?
Yes. Issuers shall communicate to insured individuals that any payment extensions and payment obligations must be paid back by the insured individual. Any unpaid payments/premiums? may be subject to billing from health care providers for unpaid claims or from the issuer for paid claims. Any communication must clearly state the issuer’s obligations during the payment extension period.
What guidance does the ER have for employers that employ 20 or more employees?
The ER requires issuers of group HMO policies to allow eligible employees to elect to continue coverage under COBRA for all employers that employ 20 or more employees as long as one person remains actively employed.
What guidance does the ER have for employers generally?
The ER requires issuers of group HMO policies to allow eligible employees to elect to continue coverage under state continuation coverage for up to 12 months for employers that employ fewer than 20 employees, as long as one person remains actively employed and enrolled in the group coverage.
How does this ER address special enrollment for health insurance coverage other than excepted benefits and short-term limited duration insurance?
The ER requires issuers of coverage not sold through the ACA Health Insurance Marketplace to waive normal special enrollment period requirements for employees who lose coverage under their employer or former employer’s group health plan to allow consumers to obtain effective coverage the day after their termination or reduction of hours.
Does this ER address possible shortages for prescription drugs?
Yes. The ER mandates issuers to provide coverage for off-formulary prescriptions at no greater cost-sharing for the insured if there is not a formulary prescription available to treat the insured. This ensures that consumers receive prescription drugs when there might be potential shortages related to the COVID-19 pandemic. This requirement applies to individual health insurance coverage and any fully insured group health insurance coverage, whether or not issued by an HMO.
Does the ER address refilling of prescription drugs?
Yes. Issuers shall allow insured individuals a one-time 90-day refill of covered maintenance medications when deemed appropriate by a prescribing physician. Issuers shall follow safety restrictions for certain types of drugs, such as opioids, benzodiazepines, and stimulants.
