What you need to know about the insurance grace period

What is the grace period?

An insurance grace period is the amount of time after the premium is due during which a policyholder can make a premium payment without the coverage lapsing. If you receive your healthcare coverage through an employer plan, your premium payments are likely split between you and your employer, with your portion being deducted pre-tax from your paycheck. In that situation, you may not encounter issues around the grace period. If you have a marketplace plan or otherwise pay for your own coverage, it's your responsibility to make sure your payments are in on time, and that's where the insurance grace period comes in.

Will I lose my health insurance if my payment is late?

If something delays your payment, you have a short period of time (the grace period) to make the payment without losing coverage. The Affordable Care Act (ACA) affected the previous practice of insurance companies dropping coverage if payment wasn't received exactly on the date it was due.

Now, the grace period consists of 30 days minimum, with subsidized marketplace plans expanding the grace period to 90 days. You must pay your first month's premium when you enroll in one of these plans, however, to complete your enrollment and be eligible for the extended grace period.

The grace period begins the first month you miss your payment, even if you make payments for the following months. It's important to make sure you've paid for all of the months in question to ensure your coverage isn't dropped.

For example, if you miss your payment for August, your grace period would end on October 31. Even if you paid your premiums on time for September and October, you would be at risk of losing coverage if you haven't caught up on the initial missed payment from August, which triggered the start of the grace period. If you didn't make that August payment by the end of October, you would lose your coverage retroactively to the last day of August.

What if coverage is terminated due to nonpayment?

The grace period can help keep you covered when things don't go according to plan, but sometimes the unanticipated can happen. When you depend on your health insurance to access your diabetes supplies, you'll want to know how to handle any potential interruptions.

If your coverage is dropped, keep these things in mind:

You have the right to appeal the loss of coverage if you think your coverage was wrongfully terminated.

If you lose your coverage due to non-payment, you'll have to wait for either a qualifying life event (QLE) that triggers a special enrollment period or open enrollment the following year to enroll in a new plan.

You may be required to pay any past-due premiums if your coverage is dropped and then re-enroll in the same marketplace plan during open enrollment.

Keep on top of your premium payments

When you live with a chronic illness, it's vital to keep on top of what facilitates your access to care and supplies. Whether you utilize an electronic reminder system, write down the due dates in your calendar, or opt into automatic payment options, you can find a system for paying your premiums that works for you. Being aware of the insurance grace period and how it applies to your health coverage can help ensure you never face being dropped from your plan unexpectedly.

Are you getting ready to handle your own insurance coverage as a young adult? Learn more about navigating health insurance when coming off a parent's insurance plan.