QUESTION

I receive premium tax credits, but I still can’t afford my premium. I’ve missed four payments in a row. Can the insurer cancel my coverage?

Individuals with no coverage | How Premium Tax Credits And Cost-Sharing Reductions Work
ANSWER

Possibly. In light of the COVID-19 pandemic, some insurance companies may voluntarily provide additional time for policyholders to submit late premium payments. Some states have required them to do so.

However, in general, a person receiving an advanced premium tax credit has a 90-day grace period to pay all premiums that are owed. If the amount owed for all outstanding premium payments is not paid in full by the end of the grace period, the insurer can terminate coverage. The insurer would then have to return funds it received from the federal government for all but the first 30 days of the grace period.

Also note that if you are seeking new coverage from an insurer to whom you owe premiums for prior 12-month coverage, the insurer can request that you pay your past due premiums as a condition of enrolling you into new coverage. This only applies to insurers to whom you owe premiums for prior 12-month coverage (i.e. if you switch to a new insurer, the company cannot condition enrollment on paying premiums you owe to your previous insurer). Insurers can impose this obligation during both open and special enrollment periods. (CMS, Payment and Grace Period Flexibilities Associated with the COVID-19 National Emergency, March 24, 2020; 45 C.F.R. § 156.270(d); 45 C.F.R. § 147.104).

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