441—75.21 (249A) Health insurance premium payment (HIPP) program. Under the health insurance premium payment program, the department shall pay for the cost of premiums, coinsurance and deductibles for Medicaid-eligible individuals when the department determines that those costs will be less than the cost of paying for the individual’s care through Medicaid. Payment shall include only the cost to the Medicaid member or household.
	 75.21(1) Condition of eligibility for group plans. The Medicaid member or a person acting on the member’s behalf shall cooperate in providing information necessary for the department to establish availability and the cost-effectiveness of a group health plan. When the department has determined that a group health plan is cost-effective, enrollment in the plan is a condition of Medicaid eligibility unless it can be established that insurance is being maintained on the Medicaid members through another source (e.g., an absent parent is maintaining insurance on the Medicaid-eligible children).
	  a.   	 When a parent fails to provide information necessary to determine availability and cost-effectiveness of a group health plan, fails to enroll in a group health plan that has been determined cost-effective, or disenrolls from a group health plan that has been determined cost-effective, Medicaid benefits of the parent shall be terminated unless good cause for failure to cooperate is established.
	  b.   	 Good cause for failure to cooperate shall be established when the parent or family demonstrates one or more of the following conditions exist:
	 (1) 	 There was a serious illness or death of the parent or a member of the parent’s family.
	 (2) 	 There was a family emergency or household disaster, such as a fire, flood, or tornado.
	 (3) 	 The parent offers a good cause beyond the parent’s control.
	 (4) 	 There was a failure to receive the department’s request for information or notification for a reason not attributable to the parent. Lack of a forwarding address is attributable to the parent.
	  c.   	 Medicaid benefits of a child shall not be terminated due to the failure of the parent to cooperate. Additionally, the Medicaid benefits of a spouse who cannot enroll in the plan independently of the other spouse shall not be terminated due to the other spouse’s failure to cooperate.
	  d.   	 The presence of good cause does not relieve the parent of the requirement to cooperate. When necessary, the parent may be given additional time to cooperate when good cause is determined to exist.
	 75.21(2) Individual health plans. Participation in an individual health plan is not a condition of Medicaid eligibility. The department shall pay for the cost of premiums, coinsurance, and deductibles of individual health insurance plans for a Medicaid member if:
	  a.   	 A household member is currently enrolled in the plan; and
	  b.   	 The health plan is cost-effective as defined in subrule 75.21(3).
	 75.21(3) Cost-effectiveness. Cost-effectiveness for both group and individual health plans shall mean the expenditures in Medicaid payments for a set of services are likely to be greater than the cost of paying the premiums and cost-sharing obligations under the health plan for those services. When determining the cost-effectiveness of the health plan, the following data shall be considered:
	  a.   	 The cost to the Medicaid member or household of the insurance premium, coinsurance, and deductibles. No cost paid by an employer or other plan sponsor shall be considered in the cost-effectiveness determination.
	  b.   	 The scope of services covered under the health plan, including but not limited to exclusions for preexisting conditions.
	  c.   	 The average anticipated Medicaid utilization, by age, sex, institutional status, Medicare eligibility, and coverage group, for members covered under the health plan.
	  d.   	 The specific health-related circumstances of the members covered under the health plan. The HIPP Medical History Questionnaire, Form 470-2868, shall be used to obtain this information. When the information indicates any health conditions that could be expected to result in higher than average bills for any Medicaid member:
	 (1) 	 If the member is currently covered by the health plan, the department shall obtain from the insurance company a summary of the member’s paid claims for the previous 12 months. If there is sufficient evidence to indicate that such claims can be expected to continue in the next 12 months, the claims will be considered in determining the cost-effectiveness of the plan. The cost of providing the health insurance is compared to the actual claims to determine the cost-effectiveness of providing the coverage.
	 (2) 	 If the member was not covered by the health plan in the previous 12 months, paid Medicaid claims may be used to project the cost-effectiveness of the plan.
	  e.   	 Annual administrative expenditures of $50 per Medicaid member covered under the health plan.
	  f.   	 Whether the estimated savings to Medicaid for members covered under the health insurance plan are at least $5 per month per household.
	 75.21(4) Coverage of non-Medicaid-eligible family members.
	  a.   	 When a group health plan is determined to be cost-effective, the department shall pay for health insurance premiums for non-Medicaid-eligible family members if a non-Medicaid-eligible family member must be enrolled in the health plan in order to obtain coverage for the Medicaid-eligible family members. However:
	 (1) 	 The needs of the non-Medicaid-eligible family members shall not be taken into consideration when determining cost-effectiveness, and
	 (2) 	 Payments for deductibles, coinsurances or other cost-sharing obligations shall not be made on behalf of family members who are not Medicaid-eligible.
	  b.   	 When an individual health plan is determined cost-effective, the department shall pay for the portion of the premium necessary to cover the Medicaid-eligible family members. If the portion of the premium to cover the Medicaid-eligible family members cannot be established, the department shall pay the entire premium. The family members who are not Medicaid-eligible shall not be considered when determining cost-effectiveness.
	 75.21(5) Exceptions to payment. Premiums shall not be paid for health insurance plans under any of the following circumstances:
	  a.   	 The insurance plan is that of an absent parent.
	  b.   	 The insurance plan is an indemnity policy which supplements the policyholder’s income or pays only a predetermined amount for services covered under the policy (e.g., $50 per day for hospital services instead of 80 percent of the charge).
	  c.   	 The insurance plan is a school plan offered on basis of attendance or enrollment at the school.
	  d.   	 The premium is used to meet a spenddown obligation under the medically needy program, as provided in subrule 75.1(35), when all persons in the household are eligible or potentially eligible only under the medically needy program. When some of the household members are eligible for full Medicaid benefits under coverage groups other than medically needy, the premium shall be paid if it is determined to be cost-effective when considering only the persons receiving full Medicaid coverage. In those cases, the premium shall not be allowed as a deduction to meet the spenddown obligation for those persons in the household participating in the medically needy program.
	  e.   	 The insurance plan is designed to provide coverage only for a temporary period of time (e.g., 30 to 180 days).
	  f.   	 The persons covered under the plan are not Medicaid-eligible on the date the decision regarding eligibility for the HIPP program is made. No retroactive payments shall be made if the case is not Medicaid-eligible on the date of decision.
	  g.   	 The person is eligible only for a coverage group that does not provide full Medicaid services, such as the specified low-income Medicare beneficiary (SLMB) coverage group in accordance with subrule 75.1(34) or the IowaCare program in accordance with the provisions of 441—Chapter 92. Members under the medically needy coverage group who must meet a spenddown are not eligible for HIPP payment.
	  h.   	 Insurance coverage is being provided through the Health Insurance Plan of Iowa (HIPIOWA), in accordance with Iowa Code chapter 514E.
	  i.   	 Insurance is being maintained on the Medicaid-eligible persons in the household through another source (e.g., an absent parent is maintaining insurance on the Medicaid-eligible children).
	  j.   	 The insurance is a Medicare supplemental policy and the Health Insurance Premium Payment Application, Form 470-2875, was received on or after March 1, 1996.
	  k.   	 The person has health coverage through Medicare. If other Medicaid members in the household are covered by the health plan, cost-effectiveness is determined without including the Medicare-covered member.
	  l.   	 The health plan does not provide major medical coverage but pays only for specific situations (i.e., accident plans) or illnesses (i.e., cancer policy).
	  m.   	 The health plan pays secondary to another plan.
	  n.   	 The only Medicaid members covered by the health plan are currently in foster care.
	  o.   	 All Medicaid members covered by the health plan are eligible for Medicaid only under subrule 75.1(43). This coverage group requires the parent to apply for, enroll in, and pay for coverage available from the employer as a condition of Medicaid eligibility for the children.
	 75.21(6) Duplicate policies. When more than one cost-effective health plan is available, the department shall pay the premium for only one plan. The member may choose the cost-effective plan in which to enroll.
	 75.21(7) Discontinuation of premium payments.
	  a.   	 When the household loses Medicaid eligibility, premium payments shall be discontinued as of the month of Medicaid ineligibility.
	  b.   	 When only part of the household loses Medicaid eligibility, the department shall complete a review in order to ascertain whether payment of the health insurance premium continues to be cost-effective. If the department determines that the health plan is no longer cost-effective, premium payment shall be discontinued pending timely and adequate notice.
	  c.   	 If the household fails to cooperate in providing information necessary to establish ongoing eligibility, the department shall discontinue premium payment after timely and adequate notice. The department shall request all information in writing and allow the household ten calendar days in which to provide it.
	  d.   	 If the policyholder leaves the Medicaid household, premium payments shall be discontinued pending timely and adequate notice.
	  e.   	 If the health plan is no longer available or the policy has lapsed, premium payments shall be discontinued as of the effective date of the termination of the coverage.
	 75.21(8) Effective date of premium payment. The effective date of premium payments for a cost-effective health plan shall be determined as follows:
	  a.   	 Premium payments shall begin no earlier than the later of:
	 (1) 	 The first day of the month in which the Employer’s Statement of Earnings, Form 470-2844, the Health Insurance Premium Payment Application, Form 470-2875, or the automated HIPP referral, Form H301-1, is received by the HIPP unit; or
	 (2) 	 The first day of the first month in which the health plan is determined to be cost-effective.
	  b.   	 If the person is not enrolled in the health plan when eligibility for participation in the HIPP program is established, premium payments shall begin in the month in which the first premium payment is due after enrollment occurs.
	  c.   	 If there was a lapse in coverage during the application process (e.g., the health plan is dropped and reenrollment occurs at a later date), premium payments shall not be made for any period of time before the current effective date of coverage.
	  d.   	 In no case shall payments be made for premiums that were used as a deduction to income when determining client participation or the amount of the spenddown obligation.
	  e.   	 The Employer Verification of Insurance Coverage, Form 470-3036, shall be used to verify the effective date of coverage and costs for persons enrolled in group health plans through an employer.
	  f.   	 The effective date of coverage for individual health plans or for group health plans not obtained through an employer shall be verified by a copy of the certificate of coverage for the plan or by some other verification from the insurer.
	 75.21(9) Method of premium payment. Payments of premiums will be made directly to the insurance carrier except as follows:
	  a.   	 The department may arrange for payment to an employer in order to circumvent a payroll deduction.
	  b.   	 When an employer will not agree to accept premium payments from the department in lieu of a payroll deduction to the employee’s wages, the department shall reimburse the employee directly for payroll deductions or for payments made directly to the employer for the payment of premiums. The department shall issue reimbursement to the employee five working days before the employee's pay date.
	  c.   	 When premium payments are occurring through an automatic withdrawal from a bank account by the insurance carrier, the department may reimburse the policyholder for those withdrawals.
	  d.   	 Payments for COBRA coverage shall be made directly to the insurance carrier or the former employer. Payments may be made directly to the former employee only in those cases where:
	 (1) 	 Information cannot be obtained for direct payment, or
	 (2) 	 The department pays for only part of the total premium.
	 75.21(10) Payment of claims. Claims from medical providers for persons participating in this program shall be paid in the same manner as claims are paid for other persons with a third-party resource in accordance with the provisions of 441—Chapters 79 and 80.
	 75.21(11) Reviews of cost-effectiveness and eligibility. Reviews of cost-effectiveness and eligibility shall be completed annually and may be conducted more frequently at the discretion of the department.
	  a.   	 For a group health plan, the review of cost-effectiveness and eligibility may be completed at the time of the health plan contract renewal date. The employer shall complete Health Insurance Premium Payment (HIPP) Program Review, Form 470-3016, for the review.
	  b.   	 For individual health plans, the client shall complete HIPP Individual Policy Review, Form 470-3017, for the review.
	  c.   	 Failure of the household to cooperate in the review process shall result in cancellation of premium payment and may result in Medicaid ineligibility as provided in subrule 75.21(1).
	  d.   	 Redeterminations shall be completed whenever:
	 (1) 	 A premium rate, deductible, or coinsurance changes,
	 (2) 	 A person covered under the policy loses full Medicaid eligibility,
	 (3) 	 Changes in employment or hours of employment affect the availability of health insurance,
	 (4) 	 The insurance carrier changes,
	 (5) 	 The policyholder leaves the Medicaid home, or
	 (6) 	 There is a decrease in the services covered under the policy.
	  e.   	 The policyholder shall report changes that may affect the availability or cost-effectiveness of the policy within ten calendar days from the date of the change. Changes may be reported by telephone, in writing, or in person. The department sends a HIPP Change Report, Form 470-3007, with all premium payments.
	  f.   	 If a change in the number of members in the Medicaid household causes the health plan not to be cost-effective, lesser health plan options, as defined in paragraph 75.21(16)“a,” shall be considered if available and cost-effective.
	  g.   	 When employment ends, hours of employment are reduced, or some other qualifying event affecting the availability of the group health plan occurs, the department shall verify whether coverage may be continued under the provisions of the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985, the Family Leave Act, or other coverage continuation provisions.
	 (1) 	 The Employer Verification of COBRA Eligibility, Form 470-3037, shall be used for this purpose.
	 (2) 	 If cost-effective to do so, the department shall pay premiums to maintain insurance coverage for Medicaid members after the occurrence of the event which would otherwise result in termination of coverage.
	 75.21(12) Time frames for determining cost-effectiveness. The department shall determine cost-effectiveness of the health plan and notify the applicant of the decision regarding payment of the premiums within 65 calendar days from the date an application or referral (as defined in subrule 75.21(8)) is received. Additional time may be taken when, for reasons beyond the control of the department or the applicant, information needed to establish cost-effectiveness cannot be obtained within the 65-day period.
	 75.21(13) Notices.
	  a.   	 An adequate notice shall be provided to the household under the following circumstances:
	 (1) 	 To inform the household of the initial decision on cost-effectiveness and premium payment.
	 (2) 	 To inform the household that premium payments are being discontinued because Medicaid eligibility has been lost by all persons covered under the health plan.
	 (3) 	 The health plan is no longer available to the family (e.g., the employer drops insurance coverage or the policy is terminated by the insurance company).
	  b.   	 The department shall provide a timely and adequate notice as defined in 441—subrule 7.7(1) to inform the household of a decision to discontinue payment of the health insurance premium because:
	 (1) 	 The department has determined the health plan is no longer cost-effective, or
	 (2) 	 The member has failed to cooperate in providing information necessary to establish continued eligibility for the program.
	 75.21(14) Rate refund. The department shall be entitled to any rate refund made when the health insurance carrier determines a return of premiums to the policyholder is due for any time period for which the department paid the premium.
	 75.21(15) Reinstatement of eligibility.
	  a.   	 When eligibility for the HIPP program is canceled because the persons covered under the health plan lose Medicaid eligibility, HIPP eligibility shall be reinstated when Medicaid eligibility is reestablished if all other eligibility factors are met.
	  b.   	 When HIPP eligibility is canceled because of the member's failure to cooperate in providing information necessary to establish continued eligibility for the HIPP program, benefits shall be reinstated the first day of the first month in which cooperation occurs, if all other eligibility factors are met.
	 75.21(16) Amount of premium paid.
	  a.   	 For group health plans, the individual eligible to enroll in the plan shall provide verification of the cost of all possible health plan options (i.e., single, employee/children, family).
	 (1) 	 The HIPP program shall pay only for the option that provides coverage to the Medicaid-eligible family members in the household and is determined to be cost-effective.
	 (2) 	 The HIPP program shall not pay the portion of the premium cost which is the responsibility of the employer or other plan sponsor.
	  b.   	 For individual health plans, the HIPP program shall pay the cost of covering the Medicaid members covered by the plan.
	  c.   	 For both group and individual health plans, if another household member must be covered to obtain coverage for the Medicaid members, the HIPP program shall pay the cost of covering that household member if the coverage is cost-effective as determined pursuant to subrules 75.21(3) and 75.21(4).
	 75.21(17) Reporting changes. Failure to report and verify changes may result in cancellation of Medicaid benefits.
	  a.   	 The client shall verify changes in an employer-sponsored health plan by providing a pay stub reflecting the change or a statement from the employer.
	  b.   	 Changes in employment or the employment-related insurance carrier shall be verified by the employer.
	  c.   	 The client shall verify changes in individual policies, such as premiums or deductibles, with a statement from the insurance carrier.
	  d.   	 Any benefits paid during a period in which there was ineligibility for HIPP due to unreported changes shall be subject to recovery in accordance with the provisions of 441—Chapter 11.
	  e.   	 Any underpayment that results from an unreported change shall be paid effective the first day of the month in which the change is reported.
This rule is intended to implement Iowa Code section 249A.3.
[ARC 7935B, IAB 7/1/09, effective 9/1/09]