What is a retroactive termination?
A retroactive termination occurs when an insurance company terminates a policy and assigns a new end date that falls in the past. This typically occurs when premium payments cease. The insurance company will set the end date to the last date the premium was paid.
Most insurance companies offer a grace period, which gives extra time to make payments. The length of this grace period depends on your specific insurance policy. If you do not pay your premium during that time, the insurance company will end your policy and mark it as inactive starting from the last paid date.
Example
Joe’s insurance policy has a monthly premium of $100. Joe stops paying on February 28th but continues using his insurance for therapy at Alma. On May 31, the insurance company reviews his account and ends his policy retroactively. They deny all claims for dates after February 28.
If an insurance company ends a plan retroactively, there are two key dates to understand:
- Termination Decision Date: The day the insurance company decides to end your policy.
- Retroactive Termination Date: The day your policy actually became inactive in the past. The insurance company will begin denying subsequent claims.
In Joe’s case:
- Termination Decision Date = May 31
- Retroactive Termination Date = February 28
What happens when Alma receives notice of a retroactive termination?
If Alma learns your insurance company ended your plan retroactively, we will notify you and your provider right away. You will then need to choose one of the following paths:
1. Check if your plan can be reinstated
If you want to try reinstating your policy:
- Alma will give you the needed information to resolve the issue with your insurance company.
- If you are able to pay outstanding premiums, your insurer may reinstate your policy.
- If reinstated, Alma will work with your insurance company directly to reprocess all impacted claims.
2. Use another eligible insurance plan
If you have another active insurance plan that partners with Alma, update your insurance details and we will run a new eligibility check.
3. Continue care without insurance
If you cannot reinstate your plan, do not have other active insurance and want to start an out-of-pocket rate:
- For past sessions: Alma will only charge you the amount originally quoted at the time of each visit.
- For future sessions: You can keep seeing your provider, but sessions will no longer be covered by insurance. You and your provider will need to agree on an out-of-pocket rate.
Can Alma predict retroactive terminations?
No. Alma cannot predict these situations. Insurance policies look active during the grace period, so clients appear covered until the insurance company makes its final decision.
How can I prevent retroactive termination?
To prevent retroactive terminations, keep your insurance information accurate and up-to-date, and ensure your premium payments remain current. To learn more, see: Insurances Partnered with Alma and Understanding Your In-Network Coverage.