Affordable Care Act “Grace Period”

Under the Affordable Care Act (ACA), if a patient who receives an advance premium tax credit does not pay his or her health insurance premiums in full, he or she enters a 90-day “grace period.” During the first month of the grace period, the patient continues to have health insurance coverage, and the patient’s health insurer will pay claims for health care services provided to the patient during that time.  However, if the patient enters the second or third month of the grace period, the health insurer may pend claims for services provided to the patient during that time.  If the patient pays his or her premiums in full before the end of the grace period, the patient retains health insurance coverage for the second and third months of the grace period, and the insurer will pay the pended claims.  But if the patient does not pay his or her health insurance premiums in full before the end of the grace period, the health insurer will not extend coverage for the second or third months of the grace period and will deny claims for services provided during that time.  In this case, a patient is then responsible for paying the entire bill for services rendered during the second and third months.  

Health insurers are required to notify physicians of patients’ grace period status. Still, a number of questions concerning the specifics of notification, as well as other issues of concern to physicians, have yet to be addressed.  It is, therefore, important that you find out how your patients’ contracted health insurance issuers will provide notice and handle other grace period issues.  It is also vital that your practice proactively take steps to minimize any potential non-payments from health insurers that are due to cancellation of coverage at the end of the grace period.