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To Avoid Surprise Insurance Bills, Tell Exchange Plan When You Move

If you thought more experience with the heath insurance marketplaces would cut down on confusion about them, you'd be wrong. The questions about how they work keep pouring in. Here are answers to some of the latest queries.

I purchased health insurance in Ohio through the marketplace in April. I then moved to Missouri and applied for marketplace coverage there that began in October. I had assumed that the Ohio marketplace would cancel my coverage there, but that didn't happen. What should I do?

When people relocate, it's up to them to inform the marketplace and their insurer, says Judith Solomon, vice president for health policy at the Center on Budget and Policy Priorities.

If you don't inform the marketplace that you're cancelling your subsidized plan, a 90-day grace period will begin the first month that you don't pay your premium. The grace period is intended to protect consumers from losing coverage immediately because of a late payment. During the first 30 days, insurers are required to continue coverage and pay claims. For the next 60 days, if consumers still haven't paid up, insurers may delay paying claims. During this period, consumers can still pay their back premiums and continue their coverage if they wish. After 90 days, the insurer can cancel coverage.

You could be on the hook for the entire premium for the first month of the 90-day period, according to the Centers for Medicare & Medicaid Services. Although consumers wouldn't generally be responsible for repaying any premium tax credit for that first month, in some circumstances they might have to pay that back when they file their taxes, CMS says.

Solomon's advice: "Call the Ohio marketplace and ask them to retroactively cancel her coverage."

I help people apply for marketplace policies and I've noticed that some of the plans sold on the state marketplaces don't cover tobacco-cessation medication and other products for free as a preventive service. Isn't that required?

Under the health law, most health plans have to cover — without cost sharing by patients — preventive services that are recommended by the U.S. Preventive Services Task Force, a nonpartisan group of medical experts. The only exception is for plans that are grandfathered under the law.

The task force recommends that doctors ask patients whether they smoke and provide smokers with cessation interventions. Last May, the administration spelled out what would be covered: at least two stop-smoking attempts annually that include at least four counseling sessions and all tobacco-cessation medications (both prescription and over-the-counter options) that have been approved by the Food and Drug Administration.

Only 17 percent of insurers on the state marketplaces cover tobacco cessation medications without cost sharing, according to a report released Tuesday by the American Lung Association.

Stingy smoking cessation coverage is short-sighted, says Brian Hickey, director of federal government relations at The Campaign For Tobacco-Free Kids, an advocacy group.

"It's not overutilized and it's not particularly costly, especially when you consider its ability to reduce future medical costs," he says.

If a plan doesn't offer comprehensive coverage, Hickey recommends bringing it to the attention of the state insurance commissioner.

As a small employer, I believe that my employees may be better off if I dropped our group health plan and let them get coverage from the public exchanges. Is there any way for me to provide my employees pre-tax reimbursement for the premiums they pay on the exchanges?

No, that's not possible. As a small employer, you won't be fined if you don't offer health insurance on the job to your employees. In contrast, employers with 100 or more workers face penalties of up to $3,000 per worker for not offering good coverage and those with more than 50 employees will have the same penalties next year.

But no matter how many people you employ, you're not allowed to give workers cash for the purpose of buying their own policy on the exchange, according to published guidance from the Obama administration. That arrangement would count as a group health plan, and under the law those arrangements can't be integrated with individual exchange coverage.

However, as a small business owner, "you can always pay more in cash to the worker and the worker can take the cash and use it as he wants, whether to buy health insurance or for something else," says J.D. Piro, a senior vice president at Aon Hewitt, who leads the benefits consultant's health law group. As an employer, you just can't earmark that cash for health insurance.

Copyright 2023 Kaiser Health News. To see more, visit Kaiser Health News.

Michelle Andrews