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1-50: Unprocessed Payment Refunds
Jul 10, 2014
Billing might be different for your Small Group customers who are on plans that comply with the Affordable Care Act (ACA or health care reform law). Anthem bills on a monthly basis for all new Small Group business effective January 1, 2014 and after. Small groups who move to an ACA plan are affected also. In the past, they might have sent Anthem early payments for premiums before they were billed, resulting in a credit. They need to understand there’s a change, and they’ll receive a refund if they send Anthem premiums too early.
You can help your customers by reminding them they should only pay the premium amount that appears on their monthly bill – Anthem cannot apply payments for premiums that we’ve not yet sent a bill for. If a group sends Anthem extra premium payments, they will try to apply the premium for two billing cycles. After that, they’ll send them a refund for any amount that can’t be applied.
There are other reasons a customer may receive a refund. For example, members who terminate can generate a credit on the bill, because Anthem returns any premium they didn’t owe. If the credit is large enough and can’t be applied in two billing cycles, Anthem will send a refund check back to the group.
Below are some examples of when Anthem will refund unprocessed cash. If one of your clients gets a refund under such circumstances, they'd like for you to be able to explain why.
The group is billed $1,000 monthly but remits enough premium to cover more than the current invoice, plus two additional months.
- On September 1, the October 1 invoice generates.
- On September 15, the group remits $10,000 for the October 1 invoice. Of that amount, $1,000 would be applied to the open October 1 invoice, leaving $9,000 in unprocessed cash.
- On October 1, the November 1 invoice is generated and another $1,000 is applied, leaving the unprocessed cash at $8,000.
- On October 16, a refund of $7,000 will be initiated. This will leave $1,000 for the December 1 invoice that will generate on November 1.
The group has 20 subscribers with a total monthly premium of $20,000 (each subscriber is billed $1,000 per month).
- On September 1, the group is paid to October 1, and the October 1 invoice generates.
- On September 11, the group submits terminations 14 of its subscribers who have elected individual coverage. The termination date is September 1, which means the employer will receive credit for both September and October premiums, which is $28,000.
- On September 15, the group remits $20,000 for the October 1 invoice.
- On October 1, the November 1 invoice is generated for the 6 remaining employees totaling $6,000 and a credit of $28,000 for the terminations that were received on September 11. The balance due on the November invoice will be a credit of $22,000.
- On October 2, the September 1, October 1 and November 1 invoices are voided, billed again, each billing only $6000 for the remaining employees. The premium received in September and October ($40,000) is reapplied to these invoices, leaving a balance of $22,000 that is not applied. A refund of $22,000 is initiated, and the December invoice will generate on November 1 totaling $6000 for the six active employees (as long as no other changes, adds or terminations are received).
This group has seven subscribers covered under medical and vision with a total monthly premium of $6,700.
- On September 1, the group is paid to October 1 and the October 1 invoice generates.
- On September 11, the group submits a request to cancel its medical product effective October 1.
- On September 15, the group remits $6,700 for the October 1 invoice.
- On October 1, the November 1 invoice is generated with a credit of $6,580 - $60 in current charges plus $6,640 in credit.
- On October 16, the October 1 and November 1 invoices are voided, billed again, and premium is applied, leaving $6,580 in unprocessed cash. A refund of $6,520 is initiated, leaving $60 for the December 1 invoice that will generate on November 1.
If you have any questions, please contact a member of your b&p Sales Team - 888.722.3373.