ACA: Can Unpaid Premiums Result in Collections and Wage Garnishment?

Key Points:
– The Affordable Care Act (ACA) generally prohibits sending unpaid health insurance premiums to collections agencies.
– However, if the outstanding balance is less than $500, it may not appear on your credit report.
– Paying the collection agency directly can be risky, as it could potentially lead to the debt being lost or mismanaged.

ACA Protections Against Debt Collection

The ACA includes provisions that protect individuals from having unpaid health insurance premiums sent to collections. Specifically, the law states that health insurers cannot:
– Sell unpaid premiums to debt collectors
– Report unpaid premiums to credit bureaus
– Garnish wages to collect unpaid premiums

These protections apply to all Marketplace plans, which are health insurance plans sold through the federal or state health insurance exchanges.

Exceptions to the Rule

There are a few exceptions to the general rule against sending unpaid premiums to collections. One exception is if the outstanding balance is less than $500. In this case, the insurer may still send the debt to a collection agency, but it likely will not be reported to the credit bureaus.

Another exception is if the individual has committed fraud or misrepresentation in obtaining the health insurance policy. In this case, the insurer may be able to pursue legal action to collect the unpaid premiums.

What to Do if Your Premiums Are Sent to Collections

If you receive a notice that your unpaid health insurance premiums have been sent to collections, you should take the following steps:

1. Contact the collection agency and verify the amount owed.
2. Dispute the debt if you believe it is incorrect or if you believe you have a valid defense under the ACA.
3. If you are unable to resolve the dispute with the collection agency, you may want to consider contacting a consumer protection agency or an attorney.

Conclusion

The Affordable Care Act provides important protections against having unpaid health insurance premiums sent to collections. However, there are a few exceptions to the general rule. If you receive a notice that your premiums have been sent to collections, it is important to take action promptly to protect your rights.

Note: If you are facing unpaid health insurance premiums, it is best to seek help from a licensed agent to understand your options and avoid potential legal issues. Do not attempt to handle this matter independently.