Our philosophy is that if a plan member uses the majority of the month from a claims perspective, they should be charged premiums for that month.
On the other hand, if they use the minority of the month, they should not be charged.
This may be different from other carriers who either pro-rate the month, or charge if any portion of the month has been used. Other carriers may issue a refund if no claims were made. Our company does not do so because we are already a refundable health plan. All premiums are by default paid back if they exceed claims + expenses in that calendar year.
Therefore, our system automatically will issue the following charges:
If a plan member's effective date for claims is before the 15th of the month, they are charged for that month.
If a plan member's effective date for claims is after the 15th of the month, they are not charged for that month.
Example 1: Additions / Enrollments
Priya is added to the plan effective January 13th. The January bill has already been released. The February bill therefore will charge 1 month for Priya for February + 1 month for Priya for January.
Rajesh is added to the plan effective January 27th. The date that his enrollment form came back was February 2nd, and the February bill has already passed. Therefore, on the March bill, Rajesh will be charged for February and March but not January, since he has not used the majority of January.
Example 2: Deletions / Terminations
Elliott is terminated from the benefit plan on February 27th. Since they have used the majority of February (past the 15th), no credit is applied.
John is terminated from the benefit plan on March 4th. The March bill has already been released. Therefore, the April bill will issue a 1 month credit to refund the March premiums since he was dropped before the 15th.
Transaction dates are important
What happens if the plan administrator drops John from the plan with a claims termination date of March 4th...but they get busy, forget to input the data, and only remember to input the data on May 4th? In that case, only 1 month premium will be credited / refunded on the June invoice.
Why can't we go back farther?
Claims can still come in after the termination date for services rendered before the termination date, so the insurance underwriters need to budget for this.
Always remember that in your refundable health insurance plan, you'll never over-pay for benefits....just remember to notify us quickly for terminations! :)