Premium Payment and Premium Aggregation Services in the FF-SHOPs

Premium Aggregation Services

The SHOP system is the enrollment and payment system of record for all enrollments for FF-SHOP plan years beginning on or after January 1, 2015. Qualified employers whose groups are enrolled in coverage through an SHOP in those plan years will receive one bill from the FF-SHOP and make one payment to the FF-FF-SHOP, which will provide premium aggregation services for all qualified employers participating in a FF-SHOP. Employer groups that are enrolled in multiple FF-SHOPs will receive one bill per FF-SHOP. Employer groups that are participating in one or more FF-SHOPs and one or more SB-SHOPs will receive more than one bill and make more than one payment. Rates charged to employers in the FF-SHOPs will be calculated at the time of initial group enrollment and upon renewal, based on approved rates for the quarter in which initial enrollment or renewal occurs.

The FF-SHOPs will use 820 transactions to communicate information about premium payments remitted to issuers. The issuer payment process will adhere to the diagram in Exhibit 18 below.

FFM and FF-SHOP Enrollment Manual

Exhibit 18 – FF-SHOPs Issuer Payment Process

As issuers transition from the premium payment process that was in place for FF-SHOP plan years that began in 2014 (when employers paid premiums directly to issuers) to the FF-SHOP premium aggregation functionality that is available for plan years beginning in 2015 and beyond (in which all payments will be routed through the FF-SHOP system), they should keep in mind the following expectations established by CMS:

 Issuers should collect past-due balances for coverage that took effect in 2014 from employers through any delinquency processes issuers have in place for plan years that began in 2014.

 Issuers should refund credits to employers’ accounts for coverage that took effect in 2014 at the end of plan years that began in 2014.

Premium Payment

Initial Group Enrollments

A full premium payment by a qualified employer to an FF-SHOP for the first coverage month of an applicable initial group enrollment is due by the 15^th day of the month prior to the desired initial coverage effective date, and must be received by CMS by the 20^th day of the month preceding the desired coverage effective date. This deadline helps ensure payments received as late as the 20^th of the month are sufficient. It may take several days for a check to clear and qualified employers should plan accordingly. Between the 16^th and the 18^th days of the month prior to coverage effectuation, qualified employers will receive the notifications detailed in Exhibit 19 below if payment has not been received by the FF-SHOP.

FFM and FF-SHOP Enrollment Manual

Exhibit 19 – FF-SHOP Payment Notifications

Date Action

16^th day of the month prior to coverage effective date

First notification posted on MyAccount notifying qualified employer that payment has not been received

18^th day of the month prior to coverage effective date

Phone call made by FF-SHOP Call Center and second

notification posted on MyAccount notifying qualified employer that payment has not been received

26^th day of the month prior to coverage effective date

Cancellation trigger is sent to the issuer

Months Following Initial Coverage Effective Date

After coverage has been effectuated, a group’s monthly premium payment is due by the first day of the coverage month. Each month, the FF-SHOPs will provide each qualified employer with an invoice that identifies the employer contribution to premiums, the employee contribution to premiums, and the total amount that is due to the FF-SHOPs. The FF-SHOPs will send each participating employer a single monthly bill on or around the 10^th of each month prior to the coverage month. The FF-SHOPs have a 31-day grace period for payment of premiums after coverage has taken effect. If full payment is not received 31 days from the first day of the coverage month, the FF-SHOP may terminate the qualified employer’s coverage for failure to pay premiums. If payment is not received by the due date, the collection and notification process detailed in Error! Not a valid bookmark self-reference. below will occur.

Exhibit 20 – Collection and Notification Process

Date Action

2^nd day after payment is due

1^st past due notification posted to qualified employer’s MyAccount; grace period begins

10^th day after payment is due

Regular monthly invoice will note any past-due amount 15^th day after

payment is due

2^nd past due notification posted to qualified employer’s MyAccount. A letter will also be mailed to the employer regardless of preferred method of

communication.

20^th day after payment is due

3^rd past due notification posted to qualified employer’s MyAccount. A courtesy phone call will be made to the qualified employer advising no payment has been received and coverage will be terminated if payment is not received before the end of the grace period. A/B associated with an employer’s account will also be notified.

If a group is in its grace period, the FF-SHOPs will consider a group to be in good standing after a FF-SHOP receives 100% of the correct account balance, which in some cases might be less than the total invoice. The current account balance may be less than the invoiced amount because a terminated enrollment of an enrollee or dependent may not be reflected on the most current

FFM and FF-SHOP Enrollment Manual

invoice. Depending on applicable state law, issuers may be able to pend claims during the 31-day period after payment is due, prior to the receipt of payment from the FF-SHOP. If a group’s coverage is terminated for non-payment of premium, issuers will receive a termination

transaction. A termination transaction will be sent to issuers three business days after the 31 day grace period ends. The 3-day lag will ensure payment made on the last day of the grace period is sufficient.

Prorating of Premiums

In the FF-SHOPs, premiums can be prorated for partial-month enrollments, which might occur when an enrollee dies or when a child dependent is born or adopted. Pursuant to 45 CFR

§155.705(b)(4)(ii)(C), premiums for coverage lasting less than one month will be prorated in the FF-SHOPs by dividing the total premium for one month of coverage by the number of days in the applicable month, then multiplying the result by the number of days in the month during which coverage is provided to the applicable enrollee or enrollees. The FF-SHOPs will charge and collect only for the portion of coverage provided for the partial month of coverage.

Examples

Example 3C: An employer receives an invoice from the FF-SHOP that does not reflect the recent termination of an employee. The employer should access the FF-SHOP portal to ensure that its current account balance is accurate and reflects the termination. The employer should pay the full current account balance to be considered in good standing with the FF-SHOP. The employer should contact the FF-SHOP Call Center if any additional assistance is required resolving this discrepancy or remitting payment.

Example 3D: An employee adopts a child and would like to add this child to his or her coverage through an FF-SHOP, with the child’s coverage become effective on March 10^th (date of

placement for adoption). The prorated premium amount for this child’s coverage is calculated by dividing the premium for one month ($350) by the number of days in the month (31), then multiplying the resulting quotient by the number of days of coverage in the partial month (22).

This equation [(350/31) * 22] calculates the prorated premium for the child’s partial coverage as

$248.39.

Terminations for Non-Payment in FF-SHOPs and FF-SHOP Reinstatements

If an FF-SHOP does not receive full payment for a group within 31 days from the first day of the coverage month, the FF-SHOP may terminate the group’s coverage for lack of payment.

Pursuant to 45 CFR §155.735(c)(2), employers wishing to have their coverage through an FF-SHOP be reinstated following termination due to non-payment of premiums must pay all premiums owed, including any prior premiums owed for coverage during the grace period, and pre-pay the premium for the next month’s coverage within 30 days following the termination. If the group pays this amount in full within the 30-day window, the FF-SHOP will send a

reinstatement transaction to the affected issuer(s) and will reinstate the group in its previous coverage. A qualified employer may be reinstated in an FF-SHOP only once per calendar year.

FFM and FF-SHOP Enrollment Manual

Employers can handle this online or by contacting the FF-SHOP Call Center. Issuers may pend claims as allowed by state law when a group is in the 31-day grace period for payment of late premiums.