Tuesday, July 22, 2014

Dumb Carrier tricks...Kaiser Edition

For the last month, I've been receiving emails from Kaiser about a change in policy:
As your business partner, we want to make you aware that Kaiser Permanente’s subscriber termination policy will be enforced effective August 1, 2014, for small groups only (not applicable for large groups). Small groups can no longer retroactively terminate subscribers or dependents prior to the month we receive the request. As a result, all subscriber terminations will be effective in the month we receive the request unless a future termination date is requested. 
For example, if you or one of your clients requests to terminate a member’s coverage beginning August 1, we must receive the request no later than August 31. A termination request received in August cannot be made effective retroactively to July 1 or June 1.
Assume, just for a moment, that you're a company with an ex-employee covered under Cobra.  You don't receive a premium payment from the employee.  The end of the month approaches.  What do you do?  

The short answer is "nothing."  The employee has a 30 day grace period to pay the late premium.  Payment is considered made on the date that it is sent to the plan.  There's no way to know by month-end whether or not the employee's coverage should be cancelled. 

Under the previous policy, you could notify Kaiser in the middle of the following month and cancel coverage back to the paid-to date.  Under the new one, you can't.  As far as I can tell, under the new policy, every time a small employer has an employee elect Cobra, they're going to be stuck paying for the last month's premium themselves. 
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