Employers

Group Administrator's Manual

Termination of Group Insurance

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Termination for Non-Payment of Dues

All premium payments are due and payable in advance; any premium for this insurance that is not paid on or before the date it becomes due is in default. After the first premium payment, the group may be allowed a 30-day grace period. During the grace period, there is no interest charge. Although the insurance shall remain in force during the grace period, Arkansas Blue Cross shall have the right to delay the processing of claims for services received by employees or dependents during the grace period, pending the payment of the premium due.

If your group health insurance is terminated for non-payment of premium, your company will be liable to Arkansas Blue Cross for the following:

  • Payment of all premiums which are due or unpaid at the time of termination, or
  • Reimbursement of all claims incurred and paid during the grace period, whichever is greater.

In addition, if coverage does terminate, you will be responsible for providing notification of termination to all covered employees.

Arkansas Blue Cross does not assume your responsibility to giving timely notice of termination, or of COBRA rights or other options available to any group member (employee) whose coverage ends due to non-payment of premium.

What Constitutes Payment

Please note that it is not sufficient, for purposes of meeting premium payment obligations under your group contract, to simply put a check in the mail. In order to constitute payment and prevent the automatic termination of all coverage upon expiration of the grace period, the full amount due must actually be received by Arkansas Blue Cross at its principal office, Sixth and Gaines Street, Little Rock, Arkansas, on or before the expiration of the grace period. If the check is dishonored or if, for any other reason, Arkansas Blue Cross does not receive final, valid payment in full of all amounts due, automatic termination at the end of the grace period will occur as if the dishonored check or other invalid payment had never been received.

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The following is a brief overview of our delinquency and reinstatement procedures.

Delinquency Procedures

Approximately 20 days after the premium due date, a delinquency letter will be sent to the group.

If payment has not been received by the end of the group's grace period and coverage has been terminated according to Arkansas Blue Cross’ records, a termination letter will be sent confirming the group's automatic termination at the end of the grace period for non-payment of premium.

NOTE: No notice is required to terminate your group contract for non-payment of premium. Termination (and all insurance coverage under your Arkansas Blue Cross contract) occurs automatically without notice when the full premium amount is not actually received in the form of a valid, final payment at our principal corporate office at Sixth and Gaines Street, Little Rock, Arkansas. However, as a courtesy to you to try to avoid an inadvertent termination and minimize the costly disruption of service and reinstatement charges (if reinstatement is allowed), we generally use the procedures below to inform you of the status of your premium payments.

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Reinstatement Procedures

In the event your group contract terminates for non-payment of premium, your group coverage may be eligible for reinstatement in the sole discretion of Arkansas Blue Cross, provided certain conditions are met to the satisfaction of Arkansas Blue Cross. The following is required for reinstatement to be considered:

  • Payment for all premiums due by cashier's check.

  • Payment, by cashier's check, of a non-refundable reinstatement application fee in the amount of $350 (or other amount as may be determined by Arkansas Blue Cross) to cover reinstatement processing, and

  • Completion and return of a signed group application for reinstatement.

The above requirements must be met within 15 days of the date of the "confirmation of termination" letter. Your request will then be forwarded to a designated underwriter for review. Following review (which we will attempt to complete on most applications within 3-5 business days), your group will be notified of our decision regarding the reinstatement request.

All efforts will be made by Arkansas Blue Cross to collect either past due premium, or reimbursement for all claims incurred and paid during the grace period, whichever is greater. If payment is not made, delinquent accounts may be referred to a collection agency.

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Termination of Insurance per Group Request

The group may elect to terminate the insurance policy with Arkansas Blue Cross on any advance premium due date. If your group wants to terminate your group insurance on any premium due date, you must give Arkansas Blue Cross written notice of termination in advance of the premium due date; please fax notices to 501-378-3248 or mail to:

Arkansas Blue Cross and Blue Shield
Attn: Customer Accounts
P.O. Box 2181
Little Rock, AR 72203-2181

If written notice of termination is not received in advance of the group's premium due date, the group will be liable to Arkansas Blue Cross for payment of all premiums which are due but unpaid, or for reimbursement for all claims incurred and paid during the grace period, whichever is the greater amount.

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Standard Ineligibility Period After Termination

A group that terminates for any reason will not be considered for reinstatement or new contract coverage for a period of six months.

If a policy terminates because the policyholder has failed to pay the premium, the policyholder shall not be eligible to reapply for another policy with the company for a period of six months from the date the policy was terminated. If the policyholder wishes to reapply, and still owes premium or claims from a previous cancellation, no reapplication will be considered until the policyholder pays- (via cashier's check)- either all premiums which were due but unpaid at the time of termination, or reimbursement to the company for all claims incurred and paid during the grace period, whichever is the greater amount; and a $500 fee (or such other amount as Arkansas Blue Cross may require) to cover the various costs resulting from the termination and reinstatement. Arkansas Blue Cross reserves the right to refuse to issue a policy or consider coverage for any group that has previously been terminated for non-payment of premium and failed to pay all amounts due to Arkansas Blue Cross within 60 days of such termination.

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