Kansas Family Medical Assistance
Manual (KFMAM)
Eligibility Policy - 11/21/2024
02000 >>> 02440
02430
02440 Premium Requirement for CHIP - A monthly family premium will be charged for CHIP coverage beginning at 167% of federal poverty. If the total countable income is less than this amount, there is no premium charge. If income is equal to or greater than 167% of poverty but less than 192% of poverty, a $20 monthly premium is charged. If income is greater than or equal to 192% of poverty but less than 218%, a $30 monthly premium is charged. If income is equal to or greater than 219% of poverty but less than 255% of poverty, a $50 monthly premium is charged.
Only one premium per family is charged regardless of the number of CHIP eligible children. The amount of premium shall be based on the highest poverty level percentage determined for the family.
Families that include participating American Indian/Alaska Native (AI/AN) children are not subject to the premium requirements. The classification of AI/AN is based on client statement and will require no further verification. The premium will be eliminated for the family unit in these situations. These families shall never be subject to a premium penalty for failing to pay premiums.
The premium obligation is determined through the eligibility process in KEES and is communicated to the premium billing vendor through an automated interface with the Premium Billing and Collection system which is operated by the premium billing vendor.
The Eligibility Specialist is responsible for providing notification to the family of their obligation, see 1423.
The premium billing vendor is responsible for premium billing, collection, and monitoring. Monthly premium notices will be sent to all families subject to a premium obligation. The initial premium statement will be mailed on either the 1st or 15th of the month, depending on when coverage is authorized. Subsequent monthly premiums will be mailed on the 1st business day of each month.
All premium payments are due on the last day of the month in which they are billed. Premium payments are sent to the following address: KanCare Premium Billing, P.O. Box 842195, Dallas, TX 75284-2195. Payments can also be made by phone by calling 1-866-688-5009. Information regarding premium status is available to staff in KEES and by accessing the premium billing system.
2441 Premium Delinquency - Payment of CHIP premiums is a requirement for CHIP eligibility with the exception of pregnant CHIP minors, see 02510. Failure to pay premiums at review results in the establishment of a three-month penalty period where CHIP coverage cannot be received. The penalty period is considered to be ‘Served’ on the first day of the month following the end of the premium penalty. Once a penalty has been served, that same amount and time periods cannot be used again to terminate or deny CHIP coverage.
An account meets the definition of delinquent when there are two invoices that have not been paid and not previously used in a penalty. These invoices do not have to be consecutive and may occur from two different eligibility periods. An account remains delinquent until the payment is made for the delinquent amount, the penalty is served, or the penalty is shortened. The Premium Billing and Collection (PB&C) system is responsible for determining when an account is delinquent and transmitting that information to KEES so it may be used in the eligibility determination.
A denial or discontinuance for delinquent premiums shall only be applied to individuals who are otherwise eligible for CHIP at the time of their review. For example, if an individual has existing health insurance, they shall be denied or discontinued for that reason. They are not considered otherwise eligible for CHIP, so the delinquency is not relevant to their denial or discontinuance
Penalties are applied at the case level, not the individual level. If there is a request to add a child to a CHIP program where there is a premium delinquency on the case, the child is ineligible for CHIP and a premium penalty would be established. If a penalty is already established and has begun, the child is ineligible for CHIP and will have the same penalty period that has already been established on the case.
2441.01 Penalties and Penalty Statuses - There are four penalty statuses, which will all be updated automatically by KEES depending upon the individual case situation. They are defined below:
- Active - Individuals outside a continuous eligibility period are not eligible for CHIP when there is an active penalty period. When a penalty is first applied to a case it starts in Active status. It will stay in this status until it moves into one of the following statuses. The penalty will be in an active status even prior to the start date of the penalty. The Active status begins from the moment the decision is made to discontinue or deny coverage.
- Negated - A penalty is cancelled before it actually begins. This occurs when the delinquent premiums are paid before the penalty start date.
- Shortened - A penalty is shortened if the consumer pays their delinquent premiums or becomes Medicaid eligible sometime DURING the penalty period.
- Served - A penalty is considered served once the penalty period has ended and no other status changes have occurred.
2442 Impact on Current Recipients - - When an ongoing CHIP recipient fails to pay their premium obligation for two invoices and the account becomes delinquent, coverage is discontinued and a three-month penalty is applied at the time of their next review.
The penalty is established beginning with the first month of ineligibility and is considered to be in an ‘Active’ status.
2442.01 Impact of Payments on the Penalty Period - If a payment is made of the delinquent amount before the penalty start date, the delinquency is resolved and the penalty is placed into a ‘Negated’ status. CHIP eligibility is reinstated without a new request for coverage being required.
If payment of the delinquent amount is made at some point during the penalty period, the penalty is ‘Shortened’. A new request for coverage is required and a new determination is made. If the request is received during the Reactivation period, a verbal request is allowed. After that time, a new application is required, which would include a verbal request for coverage as allowed per 1402.
2443 Impact on Eligibility for Former Recipients - For new applicants, a child who continues to live in the family unit upon which the premium was assigned (i.e., the case number in which the premium was assigned) cannot re-qualify for CHIP until all delinquent premiums are paid or a penalty has been served for the time period in question. This includes children who would be eligible for CHIP coverage without a premium obligation. However, as Medicaid eligibility is not affected by non-payment of premiums, any Medicaid eligible child in the family would still qualify even if there were premiums due and owing from a period in which they were CHIP eligible.
When processing a new request for CHIP, whether a new application or adding a person to an existing program, if the account meets the definition of delinquent, CHIP ineligibility exists. Prior to denial for a premium delinquency, staff must send a notice to the applicant informing them of the requirement to pay. The applicant is given the standard 12-day pending timeframe to pay the outstanding balance. If payment is not made, coverage is denied and a three-month penalty is applied. The penalty is established beginning with the month the application is processed.
2443.01 Impacts of Payments on the Penalty - If payment of the delinquent amount is made at some point during the penalty period, the penalty is ‘Shortened’. A new request for coverage is required and a new determination is made. If the request is received during the Reactivation period, per 1410.02 a verbal request is allowed. After that time, a new application is required, which would include a verbal request for coverage as allowed per 1402.
2444 Collection of Past Due Premiums - Although the penalty period for a past due premium may have been served, and another penalty will not occur for that same premium balance, the past due obligation is not forgiven. The obligation remains on the consumer’s account. Collection activities will continue to be made against the consumer until the balance is paid.
The premium billing vendor applies a special payment methodology to the accounts in such a way that will prevent the case from going into a delinquent status, solely on the basis of how the payments are applied. When the case is actively receiving CHIP, in an ACTIVE penalty or NEGATED penalty, payments are applied to the oldest invoice first. When the case has already SERVED or has a SHORTENED penalty, the payments are applied from the newest invoice to oldest invoice.
2444.01 Fees and Collections of Unpaid Premiums - If the agency incurs a fee associated with the collection of a premium obligation, such as a returned check fee, this fee will be assigned to the consumer and included as a past due amount.
Cases that have become six months past due may be referred to State Debt Set-Off for collection. Any fee charged for collections through State Debt Set-Off and will be assigned to the consumer.
2445 Premium Changes - If a change occurs during the 12-month continuous eligibility period that decreases the family's poverty level percentage (such as a change in countable income or household composition), action is to be taken to reduce or eliminate the premium as necessary.
- A premium reduction or removal is processed in the month after the month of report of the change when it is unrelated to a request for coverage for a household member.
- A premium reduction or removal is processed in the month of report when also processing a request for coverage for a household member.
- A premium shall not be increased for an individual during their continuous eligibility period, unless adding CHIP coverage for a new household member who requires a premium obligation.
A premium change notice is required.
2446 Premium Refunds and Adjustments -
Overstated Premiums - When the agency determines a premium has been overstated for a prior period, immediate action to correct future premiums shall be taken. In addition, a premium is adjusted for a prior period in the following situations:
- An agency error resulted in the incorrect premium; or
- A timely reported change was not acted upon timely and resulted in the incorrect premium.
Failure on the part of the client to report a change timely shall not result in an adjusted premium for a prior period.
To adjust the premium amount for the prior period, the Eligibility Specialist must reprocess eligibility in KEES for each month affected.
Understated Premiums - When the agency determines a premium has been understated for a current or prior period, immediate action to correct future premiums shall be taken. Only adequate notice is required when notifying of the new premium amount. If the client was initially given notice of the correct premium amount, a retroactive adjustment shall be made in KEES. If the client did not initially receive the correct notification, an overpayment shall be established for the prior period.