COVID-19 Relief: States Begin Extending Insurance Premium Grace Periods
As COVID-19 triggered layoffs and furloughs spread, some states have begun mandating that insurance issuers provide a longer grace period for premium payments. These measures are targeted at ensuring that participants can remain covered and have access to healthcare coverage during this public health emergency.
Here are some of the states relief plans that have been announced to date. For the most up-to-date information on state relief, visit the state’s Department of Insurance website.
||Prohibits carriers from terminating insurance contracts due to nonpayment.
- The extension of the grace period does not eliminate the obligation to pay the premium, but limits policy cancellation for late payment.
|March 18, 2020 – June 1, 2020
||Sixty (60) day moratorium on the cancellation/non-renewal of insurance policies for the non-payment of premiums for Arkansans diagnosed with/positively tested for COVID-19.
- Applies to all insurance policies issued in this state.
- Extension is not automatic.
- To be eligible, affected policyholders must request this extension from their insurance carriers.
- Insurance carriers may request evidence of diagnosis.
|March 20, 2020 – May 19, 2020
||Requests that all insurance companies provide their insureds with at least a 60-day grace period to pay insurance premiums, so insurance policies are not cancelled for nonpayment of premium.
- Applies to all admitted and non-admitted insurance companies that provide any insurance coverage in California.
- Requests that all insurance agents, brokers, and other licensees take steps to ensure customers can make prompt insurance payments.
|March 18, 2020
||Requests that all carriers doing business in Delaware suspend cancellations and nonrenewals due to nonpayment of premium.
- Applies to admitted and non-admitted carrier and all lines of insurance.
- Policyholders are encouraged to contact their carriers to discuss their options if they are suffering a COVID-19 related hardship.
- Producer licensees are advised to take all necessary actions to ensure their ability to promptly service claims and provide other essential services to insureds.
|March 20, 2020 until withdrawn
||Directs that, for the next 60 days, all Property and Casualty Insurers and Health Insurers refrain from canceling any policy, for the cause of non-payment.
||March 20, 2020 – May 19, 2020
||Encourage all Life & Health Carriers and Property and Casualty Insurers to make reasonable accommodations so that individuals and businesses do not lose coverage due to non-payment of premium.
- Applies to both personal and commercial lines of property and casualty insurance and all lines of life and health insurance.
- Reasonable accommodations may include suspension of premiums due, extension of billing due dates and premium grace periods, and waiver of installment and late payment fees.
- Insurers should take steps to encourage policyholders to use electronic payment technology on websites, apps and electronic bank transfers whenever possible.
|March 20, 2020
||Health insurance carriers are advised to work with employers experiencing financial hardship on a case-by-case basis to allow for reasonable flexibility in the timing of premium payments.
||March 23, 2020
||Allows employers to offer employees a grace period for insurance premiums. Additionally, all health insurers must provide the option of deferring premium payments interest free for up to 60 calendar days from the original premium due date.
Health insurers must allow employers to continue covering employees even if the employee would otherwise become ineligible for insurance because of a decrease in the hours worked a week.
|March 20, 2020 until expiration of Ohio state of emergency.
* Due to ERISA preemption, self-insured plans may be exempt from these requirements to the extent that the guidance regulates insurance.
For more information on evolving compliance regulations the wake of the COVID-19 pandemic, visit the OneDigital Coronavirus Advisory Hub, or reach out to your local OneDigital advisory team.
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