Billing options for Individual
health insurance
With most
major health carriers in
California, you have multiple
billing options to pay your premium.
The premium is the monthly amount
you pay the carrier to keep your
policy in effect. Making sure
your premium is paid is extremely
important with
Individual Family
coverage as your health policy can
terminate if it is not received.
Health insurance by definition is a
pre-pay policy which means that you
are paying for an upcoming period.
For this reason, non-payment will
not affect your credit but it will
cancel out the policy. There
is typically a grace period for
payment of individual premium but
it's best not to pay late. If
your health has changed, you may not
be able to re-qualify for coverage
when you go through
medical
underwriter. Let's look at the
various billing options on the
market and discuss the advantages
and disadvantages of each.
Health insurance billing by mail
This is the traditional way to
pay your health insurance
policy. You receive a bill
by mail and pay it accordingly.
The bill usually comes mid-month
prior to the period you are
paying. For example, the a
billing for the period of
October might arrive
mid-September. You usually
have multiple billing periods to
choose from. Some carriers
will offer monthly, bi-monthly,
or quarterly billings.
Some carriers such as
Anthem Blue Cross only offer
bi-monthly and quarterly
billings. Blue Cross has
also instated a charge for the
billing option of $2. This
is probably a trend the other
carriers will follow as they are
trying to reduce costs in any
way possible as
health insurance
rates continue to increase.
Some people like to see the
billing and have more control
but this billing type is also
subject to problems if mail is
delayed or addresses change.
You can have the bill go to a
different address than the
actual subscriber's address.
This is typical with parents
paying for children's coverage
or PO boxes since the subscriber
address must be a hard street
address. You can change
your billing address any time
during the year. Some of
the carriers allow an
online
health application to proceed without
the actual first check (made to
carrier) being in house.
Once approved, the carrier's
generate a bill which must be
paid to put the policy in-force.
Credit Card billing option for
Individual health insurance
This is a newer billing type that
has become very popular. You
can either choose to use the credit
card option for just the first
payment along with the application
or on a reoccurring basis.
Having the first payment by credit
card allows the application to
process with no mail required.
It can be done online or by fax.
Some carriers allow you to choose or
at least narrow the date of the
credit card pull. The initial
pull is usually at the time of
application (can be refunded if you
choose not to accept the policy) or
a few business days after approval.
Credit card pulls are usually done
monthly and the default date is the
first few days of the month.
The nice part about the credit card
option is that it is automated and
there is less chance of missing a
health insurance payment and
jeopardizing your policy. You
can always change to another billing
type during the year but credit card
is advisable as we have seen the
issues related to people missing
bills and losing their coverage with
no options to re-qualify.
Automatic checking deduction option
for individual family health plan
Automatic deductions are similar to
the credit card option in that is
automated and transacted on a
monthly basis. Many of the
same options such as choice of date
pulled, monthly basis, and initial
handling are similar to credit card.
You will need to submit a VOIDed
check with the application or with
the form to initiate the withdrawal.
INDIVIDUAL