What is a retroactive termination?
Retroactive termination is the assignment of a new end date to an insurance policy that is no longer active, often because the plan is no longer being paid for. The new end date assigned is typically the date a plan’s premium was last paid.
Insurance companies typically provide a grace period for payments, but the length of the grace period can vary based on terms defined in the insurance policy. If payments are not made within the allowed grace period, the policy will be retroactively terminated, effective the date the premium was last paid.
Example:
Joe’s insurance policy has a monthly premium of $100. Starting on February 28th, Joe stops paying his premium but continues to use his policy for therapy visits at Alma . On May 31st, Joe’s insurance company determines his plan will be retroactively terminated and denies all claims filed after February 28th.
When a plan is retroactively terminated, there are two important dates to understand:
- Termination Decision Date - The date a decision is made regarding your retroactive termination
- Retroactive Termination Date - The date your insurance company deems your policy inactive and begins denying subsequent claims.
In Joe’s example above, the Termination Decision Date is May 31st, and the Retroactive Termination Date is February 28th.
What happens when Alma receives notice of a retroactive termination?
In the event of retroactive termination, we will notify you and your provider immediately. You then have the following options:
- You will need to determine if your policy can be reinstated or if you have active insurance that is eligible with Alma's Insurance Program. If not,
- You will need to establish an out-of-pocket rate with your provider.
If you seek to reinstate your insurance policy:
- Alma will provide you with the necessary information to resolve the issue with your insurance provider. If you are able to pay your outstanding premiums, your insurance provider may reinstate your policy.
- If your policy is reinstated, Alma will work with your insurance provider directly to reprocess all affected claims.
If your policy is not reinstated, you don't have active, eligible insurance, and you need to establish an out-of-pocket rate:
- You will remain ineligible for future visits through Alma’s insurance program until updates are made to your insurance policy.
- You will still be responsible for what you were originally quoted in your Alma invoices for the affected sessions.
Can Alma predict these types of terminations?
Unfortunately, Alma cannot predict retroactive terminations. Insurance policies remain active throughout grace periods, and because of this, clients appear to have in-network coverage with their insurance provider until the official termination date.
How can retroactive termination be prevented?
In order to prevent retroactive termination, it is vital to ensure that your insurance information is up to date. To learn more about Alma’s insurance policy, check out Insurances Partnered with Alma and Understanding Your In-Network Coverage.