PURPOSE: This rule establishes guidelines for the health insurance premium payment program in accordance with section 1906 of the Social Security Act, P.L. 101-508 of November 5, 1990, as amended. The Department of Social Services, Division of Medical Services shall pay for the cost of enrolling an eligible Medicaid recipient in a group health insurance plan when the Division of Medical Services determines it is cost-effective to do so.

1. (1) Definitions. Group health insurance shall mean any plan of, or contributed to by, an employer (including a self-insured plan) to provide health care (directly or otherwise) to the employer’s employees, former employees, or the families of the employees or former employees. A group health plan must meet section 5000(b)(1) of the Internal Revenue Code of 1986, as amended, and include continuation coverage pursuant to Title XXII of the Public Health Service Act, section 4980B of the Internal Revenue Code of 1986, or Title VI of the Employee Retirement Income Security Act of 1974, as amended. Participation in a health insurance plan that is not group health insurance as defined in this section is not a condition of Medicaid eligibility.

2. (2) Condition of Eligibility. An individual eligible for Medicaid, or a person acting on the recipient’s behalf, shall cooperate in providing information necessary for the Division of Medical Services to establish availability and cost-effectiveness of group health insurance by completing the Application for Health Insurance Premium Payment (HIPP) Program, Form MO886-3179(6-94), included herein. As a condition of Medicaid eligibility, persons who are not enrolled in an available group insurance plan which the division has determined is cost-effective, and who are otherwise eligible for Medicaid, shall apply for enrollment in the plan.

   1. (A) The Department of Social Services, Divisions of Medical Services shall pay all enrollee premiums and deductibles, coinsurance and other cost-sharing obligations for items and services otherwise covered under the Medicaid program. Payment of these items is considered as payment for medical assistance; the group health insurance is the primary payor to Medicaid. Only coverage of services not provided under the group health plan, but to which the individual is entitled under the Medicaid program, shall be provided under Medicaid as wrap-around coverage.

   2. (B) When an applicant, recipient, parent, guardian or caretaker fails to provide information necessary to determine availability and cost-effectiveness of group health insurance, Medicaid benefits of the applicant, recipient, parent, guardian or caretaker shall be denied unless good cause for failure to cooperate is established. If an applicant, recipient, parent, guardian or caretaker fails to enroll in a group health insurance plan that has been determined cost-effective, or disenrolls from a group health insurance plan the department has determined cost-effective Medicaid benefits of the applicant, recipient, parent, guardian or caretaker shall be terminated unless good cause for failure to cooperate is established. Good cause for failure to cooperate shall be established when the applicant, recipient, parent, guardian or caretaker demonstrates one (1) or more of the following conditions exist:

      1. 1. There was a serious illness or death of

the applicant, recipient, parent, guardian or caretaker or a member of the applicant’s, recipient’s, parent’s, guardian’s or caretaker’s family.

1. 2. There was a family emergency or

household disaster such as a fire, flood or tornado;

1. 3. The applicant, recipient, parent,

guardian or caretaker offers a good cause beyond the applicant’s, recipient’s, parent’s, guardian’s or caretaker’s control; and

1. 4. There was a failure to receive the

department’s request for information or notification for a reason not attributable to the applicant, recipient, parent, guardian or caretaker. Lack of a forwarding address is attributable to the applicant, recipient, parent, guardian or caretaker.

1. (C) Medicaid benefits of a child shall not be denied or terminated due to the failure of the parent, guardian or caretaker to cooperate. Additionally, the Medicaid benefits of the spouse of the employed person shall not be denied or terminated due to the employed person’s failure to cooperate when the spouse cannot enroll in the plan independently of the employed person.

1. (3) Cost-effectiveness. Enrollment in a health insurance plan is considered cost-effective when the cost of paying the premiums, coinsure, deductibles and other cost-sharing obligations, and additional administrative costs is 13 CSR 70-97

likely to be less than the amount paid for an equivalent set of Medicaid services. When determining the cost-effectiveness of the health insurance plan, the following data shall be considered:

1. (A) The cost of the insurance premium, coinsurance and deductible.
2. (B) The scope of services covered under the insurance plan, including exclusions for pre-existing conditions, exclusions to enrollment and lifetime maximum benefits imposed;
3. (C) The average anticipated Medicaid utilization, by age, sex, geographic location and coverage group, for persons covered under the insurance plan;
4. (D) The specific health-related circumstances of the persons covered under the insurance plan. The HIPP Medical History Questionnaire, Form MO886-3178(6-94) shall be used to obtain this information; and
5. (E) Annual administrative expenditures of an amount determined by the Division of Medical Services per Medicaid recipient covered under the health insurance policy.

1. (4) Coverage of Non-Medicaid-Eligible Family Members. When is is determined to be cost-effective, the department shall pay for health insurance premiums for non-Medicaid-eligible family members if a non-Medcaid-eligible family member must be enrolled in the health plan in order to obtain coverage for the Medicaid-eligible family members. However, the needs of the non-Medicaid-eligible family members shall not be taken into consideration when determining cost-effectiveness, and payments for deductibles, coinsurances or other cost-sharing obligations shall not be made on behalf of family members who are not Medicaid-eligible.

2. (5) Exceptions to Payment. Premiums shall not be paid for health insurance plans under any of the following circumstances:

   1. (A) The insurance plan is designed to provide coverage only for a temporary period of time (for example, thirty to one hundred eighty (30–180) days);
   2. (B) The insurance plan is a school plan offered on the basis of attendance or enrollment at the school;
   3. (C) The premium is used to meet a spenddown obligation when all persons in the household are eligible or potentially eligible only under the spenddown program. When some of the household members are eligible for full Medicaid benefits, 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 spenddown program. As long as the health insurance premium is not used as a deduction to income when determining client participation in the Medicaid program, then spenddown coverage shall not exclude a Medicaid eligible individual from participating in the HIPP program;
   4. (D) 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 (for example, fifty dollars ($50) per day for hospital services instead of eighty percent (80%) of the charge); or
   5. (E) The persons covered under the plan are not Medicaid-eligible on the date the decision regarding eligibility for the HIPP program is made.
3. (6) Duplicate Policies. When more than one
4. (1) health insurance plan or policy is available, the Department of Social Services, Division of Medical Services shall pay only for the most cost-effective plan. However, in situations where the department is buying-in to the cost of Medicare Part A or Part B for eligible Medicare beneficiaries, the cost of premiums for a Medicare supplemental insurance policy may also be paid if the department determines it is likely to be cost-effective to do so.
5. (7) Discontinuance of Premium Payments. When all Medicaid-eligible members covered under the health insurance plan lose Medicaid eligibility, premium payments shall be discontinued as of the month of Medicaid ineligibility. When only some of the Medicaid-eligible members covered under the health insurance plan lose Medicaid eligibility, a review shall be completed in order to ascertain whether payment of the health insurance premium continues to be costeffective.

6. (8) Effective Date of Premium Payment. The effective date of premium payments for costeffective health insurance plans shall be determined as follows:

   1. (A) Premium payments for cost-effective health insurance plans shall begin with the month the HIPP program application is received by the department, or the effective date of eligibility, whichever is later. If the person is not currently enrolled in the costeffective health insurance plan, premium payments shall begin in the month in which the first premium payment is due after enrollment occurs; and
   2. (B) In no case shall payments be made for premiums which are used as a deduction to income when determining client participation in the Medicaid program.

7. (9) Method of Premium Payment. Payments of health insurance premiums will be made directly to the insurance carrier except as follows:

   1. (A) The department may arrange for payment to the employer to circumvent a payroll deduction;
   2. (B) When the 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 policyholder directly for payroll deductions or for payments made directly to the employer for the payment of health insurance premiums:
   3. (C) When premium payments occur through an automatic withdrawal from a bank account by the insurance carrier, the department may reimburse the policyholder for said withdrawals; and
   4. (D) When the department is otherwise unable to make direct premium payments because the health insurance is offered through a contract that covers a group of persons identified as individuals by reference to their relationship to the entity, the department shall reimburse the policyholder for premium payments made to the entity.
8. (10) Reviews of Cost-Effectiveness. Reviews of cost-effectiveness will be completed at least every six (6) months for employer-related group health plans and annually for nonemployer-related group health plans. Additionally, redeterminations shall be completed whenever a predetermined premium rate, deductible, or coinsurance increases, some of the persons covered under the policy lose full Medicaid eligibility, loss of employment when the insurance is through an employer, or there is a decrease in the services covered under the policy. Recipients shall report all changes concerning health insurance coverage to the local Division of Family Service’s office within ten (10) days of the change.

9. (11) Notices.

   1. (A) Notice shall be provided to the household under the following circumstances:

      1. 1. To inform the household of the initial

decision on cost-effectiveness and premium payment (Form MO886-3180(6-94) or Form MO886-3181(6-94));

1. 2. To inform the household that premi-

um payments are being discontinued because Medicaid eligibility has been lost by all persons covered under the policy (Form MO886- 3182(6-94)); or

1. 3. The policy is no longer available to

the family (for example, the employer drops insurance coverage or the policy is terminated by the insurance company, Form MO886- 3182(6-94)).

1. (B) A timely notice shall be provided to the household informing them of a decision to discontinue payment of the health insurance premium because the department has determined the policy is not longer cost-effective (Form MO886-3182(6-94)).
2. (C) Notice of appeal and hearing rights are as provided for in 208.080, RSMo.

1. (12) Premium or Rate Refunds. The department shall be entitled to any premium refund due to overpayment of premium or payment of an inactive policy for any time period for which the department paid the premium. 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, because of lower than anticipated claims, for any time period for which the department paid the premium. AUTHORITY: sections 208.153 and 208.201, RSMo 2000.* Original rule filed June 30, 1994, effective Jan. 29, 1995. Amended: Filed June 1, 2005, effective Nov. 30, 2005. *Original authority: 208.153, RSMo 1967, amended 1973, 1989, 1990, 1991 and 208.201, RSMo 1987.