I tried to renew my same plan for 2018, but the insurance company says I missed a payment and won’t let me continue coverage in 2018 until I pay the back premium I owe. Can they do that?
Yes, in some circumstances. Under a new federal rule, starting in 2018, insurers are allowed to require people who owe back-due premiums from the past 12 months to repay the premium debt before they will renew coverage the year. However, certain restrictions on this practice apply.
First, each insurer must decide whether to adopt this practice and, if it does, must apply it consistently for all enrollees. Some insurers have decided not to adopt this practice, at least for the 2018 coverage year. In addition, states can prohibit or limit this practice by insurers.
Second, the insurer is required to provide you with prior notice that it intends to take this action. Notice should have been provided to you in 2017 if your insurer intends to adopt this practice for 2018.
Third, since this rule took effect on June 19, 2017, the insurer can only take this action for missed premium payments that occurred on or after June 19, 2017.
Fourth, the insurer can only require you to repay the net amount of back premium – the full premium amount minus the amount of premium tax credit the federal government paid the insurer on your behalf – for one month. People who receive premium tax credits in the marketplace must be given a 3-month grace period to catch up if they miss a premium payment. Coverage can be cancelled, retroactive to the end of the first month of the grace period, for people who don’t get caught up. Insurers that cancel coverage for nonpayment are allowed to keep the premium tax credit for that first month.