The last few months of the year are a busy time for a lot of businesses, for a variety of reasons. It’s also especially busy for the team at PHP as a large portion of our business renew their health plans with a January 1 effective date. We recognize the hustle and bustle employers face preparing for the new year and, adding in the holiday season, often leads to juggling many balls and a bit of organized chaos.
One of those balls employers absolutely don’t want to drop is their group health insurance. Some may push the health plan to the back burner. But, while it may seem like the health plan could be delayed without consequence, it definitely CAN NOT. Why, you may ask?
Here are a few of the negative impacts when a health plan is NOT renewed on time:
Employee’s health coverage can be disrupted
Some health plans may renew automatically, but others require a paper or electronic form to be completed and returned to the insurance carrier. If a form is required, it must be completed and returned by the specified deadline in order for the health plan to be active on the renewal date without a disruption in coverage.
What happens if the paperwork is not back in time? A delayed renewal can cause a disruption or gap in insurance coverage for your employees and impact their access to healthcare services. For example, this could mean issues in refilling vital prescriptions, cancelled appointments, and complications in using emergency services.
When the carrier is waiting on this renewal, the employer’s account is placed on a benefit hold. During a benefit hold, any medical or prescription claims for the account’s employees are not paid. For example, if an employee goes to the pharmacy to fill a medication during the benefit hold, they will be told their insurance is inactive and they will have to pay out-of-pocket to receive the medication. As you know, certain medications can be very costly and this delay can put employees in a very difficult spot. This situation will also result in calls to the employer, the HR representative, and/or the benefits advisor, potentially after work hours or during the holidays, to find answers and gain a resolution.
ID cards won’t arrive in time
A delay in returning all forms and paperwork results in a delay of the processing of your renewal. The renewal process must be completed (data inputted and verified into the carrier’s system) before member ID cards can be generated, printed, and mailed to your employees.
This is especially crucial when your health plan renews on January 1. Not only is this an extremely busy time for an insurance carrier’s enrollment department (with more companies renewing in January than any other month), but this is also the busiest time of the year for the United States Postal Service and other delivery and shipping companies. Delays in delivery time with these companies can impact receipt of ID cards, as well.
The ID card is important tool in your employee’s ability to use their health benefits. Not having the ID card when receiving services can result in issues in receiving care, verifying eligibility, or in billing of services. In some cases, employees may be able to access an electronic version of their ID card through their member account online prior to receiving the actual card in the mail. Even then, the electronic ID card can only be accessed online after all forms are returned and the renewal is processed.
Premium billing delays
You may be thinking, “My bill will be late? So what, sounds like a positive to me!” However, this often creates serious issues for a company. Many businesses operate a standard billing cycle, meaning designated dollar amounts are budgeted for specific timeframes. Delays in premium billing can create budget and cash flow issues for an employer—all avoidable with a timely renewal of their health plan.
Avoid these issues. Know the deadline.
A key step to avoiding the issues we have just discussed is to know your renewal deadline and to meet it! For PHP clients, the renewal deadline is the 15th day of the month prior (December 15 for a January 1 effective date, for example).
Typical processing time runs between 5-7 business days, but when large volumes of business is renewing at once, processing time can take a bit longer so allow up to 10 business days. It’s crucial to get completed information submitted on time and to give an appropriate period to process the information, ensuring uninterrupted coverage, delivered ID cards, timely premium bills, and ultimately, happy employees!
If you have any questions about renewing your health coverage, please contact your benefits advisor or the PHP Employer Services Team.
