7.5 Dropped Health Insurance Coverage

7.5.4 Dropped coverage policy for BadgerCare Plus Prenatal Program

7.5.1 Introduction

Beginning July 1, 2012, there are two Dropped Health Insurance Coverage policies in effect:

The 80% Dropped Coverage Test.
The 9.5% Dropped Coverage Test.

The 80% Dropped Coverage policies will continue to apply to non-exempt children (See 7.1). The 9.5% Dropped Coverage Test applies to non-pregnant, non-disabled adult parents and caretakers until December 31, 2013.

7.5.2 The 80% Dropped Coverage Test

Children are ineligible for BadgerCare Plus (BC+) benefits for three calendar months following the month in which coverage through an employer-provided health insurance plan, which meets the standards of a HIPAAHIPAA is the Health Insurance Portability and Accountability Act. A HIPAA Standard Plan is any group health care plan that provides medical care to covered individuals and/or their dependents directly or through insurance, reimbursement, or by some other means. Medical care means amounts paid for diagnosis, cure, mitigation (moderation), treatment or prevention of disease; or amounts paid for the purpose of affecting any structure or function of the body. A policy that pays for a doctor's services in either an in-patient or outpatient setting qualifies as a HIPAA plan. The amount or type of benefits paid; co-insurance, deductibles, caps, etc., do not matter as long as the plan meets the HIPAA Standard Plan criteria. The health care plan cannot be limited to a single type of covered service or only accessible in a very defined circumstance. Plans limited to accident, disability, vision, long term care or dental are not examples of HIPAA plans. standard plan, ended if:

The employer paid 80% or more of the premium or the insurance was part of the Wisconsin state employees’ health insurance plan; and,
The applicantA request for BadgerCare Plus coverage. The request must be on the Department's or Federally-facilitated Marketplace’s application, registration form or account transfer (from Federally-facilitated Marketplace) and must contain name, address, and a valid signature. The applicant must submit a signed and completed application form to complete the application process./member is child under age 19 and the child is not exempt; and
The individual did not have good cause for dropping the coverage (See 7.6).

Example 1: Joanne is employed and has access to employer sponsored health insurance in which the employer pays 80% of the premium. The children are not exempt from the health insurance access and coverage tests. In May 2013, she dropped their family health insurance coverage through her employer. In June, Joanne applies for BC+ for herself and her family. Because Joanne dropped her health insurance in which the employer pays at least 80% of the family plan premium, her children are not eligible for BC+ for 3 months after the coverage ended.

Example 2: Joanne was employed and had family coverage under employer sponsored health insurance in which the employer paid 80% of the premium. The children are not exempt from the health insurance access and coverage tests. In May 2013, Joanne voluntarily quit her job. In June, Joanne applies for BC+ for herself and her family. Because Joanne had health insurance coverage in which the employer paid at least 80% of the family plan premium, and she voluntarily quit her job, her children are not eligible for BC+ in June, July and August because Joanne dropped coverage. The family's past access to employer sponsored insurance is not affecting eligibility because the loss of employment is a good cause reason for access.

7.5.3 The 9.5% Dropped Coverage Test

Note: The 9.5% Dropped Coverage Test will no longer be in effect beginning January 1, 2014.

Parents and caretakers are ineligible for BadgerCare Plus (BC+) benefits for three calendar months following the month in which coverage through an employer-sponsored health insurance plan, which meets the standards of a HIPAA standard plan, ended if:

The cost of premiums for the health plan was less than 9.5% of their countable household income, or if the individual was covered by a Wisconsin state employee’s health insurance plan, regardless of the cost of the premiums, and their income is at least 150 % of the FPL, and
The person is not exempt from access and coverage policies (See 7.1), and
The individual did not have good cause for dropping the coverage (See 7.6).

Note: Non-pregnant, non-disabled parents and caretaker relatives with state employee health insurance coverage, who have household income between 133% and 150% FPL, are only ineligible for BadgerCare Plus if the employee-only premiums were not more than 9.5% of household income.

Example 1: Joanne is employed and has access to employer-sponsored health insurance through which her premiums are less than 9.5% of her income for her health insurance. Joanne’s family income is 160% of the federal poverty level. In July, Joanne voluntarily quit her job. In August, Joanne applies for BC+. Since Joanne had health insurance coverage that met the access requirements for herself and she voluntarily quit her job, Joanne is not eligible for BC+ in August, September and October.

7.5.4 Dropped Coverage Policy for BadgerCare Plus Prenatal Program

If a pregnant woman applying for the BC+ Prenatal Program has dropped insurance coverage she is ineligible for three calendar months following the month the insurance coverage ended, unless she has good cause for dropping the insurance.

The ”dropped coverage” policy applies, regardless of the amount of the person or employer’s share of the premium:

If the coverage is under a major medical health insurance plan which meets the standards of a HIPAA standard plan. The insurance plan:

Can be individual or family coverage,
Does not have to be employer based, and
Is not BadgerCare, BadgerCare Plus, Medicaid, Medicare Managed Care (aka Medicare Choice Plus), Medicare, Medicare Supplemental policies, HIRSP, General Relief, General Assistance, or Family Health Plan (Marshfield clinics).

This page last updated in Release Number: 13-02

Release Date: 10/25/13

Effective Date: 10/01/13