What is a retroactive termination?
Retroactive termination happens when an insurance policy is given a new end date in the past, typically the day of the last paid premium. The termination often occurs due to non-payment through commercial plans or COBRA.
In the case of retroactive termination, there are two relevant dates you need to know:
- Termination Decision Date – The date a decision is made regarding your retroactive termination
- Retroactive Termination Date – The date your insurance company deems your policy inactive and begins denying subsequent claims
The example below illustrates the difference between these two dates:
On May 31, Joe’s insurance company determined that his policy would be retroactively terminated to February 28. The Termination Decision Date is May 31 and the Retroactive Termination Date is February 28. Joe’s insurance will deny any claims filed after February 28.
Why do retroactive terminations happen?
Insurance companies typically provide a grace period for payments, although the length varies and is determined by the policy’s terms. Insurance companies will provide notice for all unpaid premiums throughout the grace period. If payments are not completed by the end of the defined grace period, the policy will be retroactively terminated to the date of the last paid premium.
Can Alma predict these types of terminations?
No. Because policies remain active throughout grace periods, clients will appear to have in-network coverage with their insurance provider until the official termination date. Alma cannot predict retroactive terminations.
What happens when Alma receives notice of a retroactive termination?
We will immediately notify you and your provider in the event of retroactive termination. You will need to complete the following steps:
- Seek to reinstate your insurance policy
- Alma will provide you with the necessary information to resolve the issue with your insurance provider. Your insurance provider may reinstate your policy if you are able to pay your outstanding premiums.
- If your policy is reinstated, Alma will work with the insurance company directly to reprocess all affected claims.
- If your policy is not reinstated, Alma will refund or cancel any invoices paid for the denied dates of service.
- You will need to establish an out-of-pocket rate with your provider
- You will be marked ineligible for future insurance visits through Alma until updates are made to your insurance policy