5 Important Things Employers Should Know About Paying and Auditing Your Monthly Health Insurance Invoice

Once your insurance plan has been processed and set up by the insurance carrier, you will receive monthly invoices which will detail the enrollments for each of your employees. It is important to be timely in submitting your premium payments in order to avoid the risk of losing coverage by paying these before the due date.

1) Invoice Setup

For some employers, it may be easier to set up recurring payments so as not to miss the payment deadline. In that case, if you are unsure of when the invoices will be generated, you may contact your carrier to find out. If you have not received your invoice, contact your insurance carrier to let them know, as well as to verify the address that they have on file for you.

It is important to note that any additions to your plan or terminations - if not reflected on the current statement - will “catch up” on the next statement cycle. For instance, if you have terminated an employee after the invoice was generated, pay the invoice as billed and look for the credit/overpayment on the next month’s premium.

2) Late Premium Payments

Insurance carriers will usually allow late payment only a couple of times before they will terminate your policy. Once terminated, most carriers have a waiting period before they will allow you to have another policy written by them (usually 12 months).

What’s more is late payments to the carrier can result in a pending of all claims and prior authorization. (Employees calling in to check status will be notified of this.

3) Plan Reinstatement Process

Another part of the reinstatement process that is worth mentioning are the fees associated; which range anywhere between $100 - $300 per occurrence, should you miss your premium payment. All premiums must be made current and all future payments will need to be made via ACH.

4) Terminations or Additions

It is very important to familiarize yourself with your insurance carrier’s Administrative Manual and to understand the guidelines surrounding notification for terminations or additions to your health insurance plan.

Many of the carriers have a strict 90-day lookback period in which they will adjust your invoice for a retro term or a retro addition. It is your responsibility to notify the insurance carrier or,  as outlined below - your third-party administrator, of this. Failing to do so can be quite costly if the errors are not caught in a timely manner.

5) Paying a Third-Party Administrator

If you have a third-party administrator (TPA), like get-benefits, to coordinate your billing and eligibility, you will also receive another benefit: consolidated billing as well as COBRA administration.

These benefits take the administrative burden off the employer by outsourcing those duties as it relates to keeping track not only of the employee’s eligibility, but also the various benefits that their employees are enrolled in. In addition, consolidated billing and COBRA administration ensure that each insurance carrier is paid promptly and notified of the change.

You will need to follow the same “due date” guidelines with a TPA as you would an insurance carrier directly. Since the TPA is responsible for getting the premiums paid to each insurance carrier, this invoicing is in advance of the health insurance carrier’s due date, giving the employer time to review the invoice.

--

In summary, it is best to pay your carrier or Third Party Administrator as billed as it may cause a delay in the processing of your group’s premium. Many carriers must have any discrepancies accounted for before posting the premium payment.

By either paying short (due to a terminated employee) or by paying the incorrect amount, the insurance carrier must be able to reconcile their invoice to the penny! This can cause pending of claims payment and processing.

If you have questions as it relates to premium billings be sure to ask your carrier or Third Party Administrator before making any changes.