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Vendor Management, Payments, and Collections (VMPC) FAQ

Guidance for FAQ regarding Payment Processing and General Information

Program Area: Vendor Management, Payments, and Collections (VMPC)

Question: What system capabilities will an issuer need to account for premium payments and advance payments of the premium tax credit (APTC)?

Answer: As required by 1412(c)(2)(A) of the Affordable Care Act, advance payment of the premium tax credit (APTC) will be made by Treasury to issuers of qualified health plans on a monthly basis. An issuer receiving an APTC shall reduce the premium charged to the individual by the amount of the advance payment for the period (1412(c)(2)(b)). This requirement, as well as the statutory requirement for the issuer to notify the consumer of the advance payment of the premium tax credit on each billing statement, is codified at 45 CFR 156.460(a), Issuers, therefore, will need to be able to account for these two payment sources - from the individual for premium and from Treasury for the APTC - for the buildup of the full premium amount. There are existing programs that require an issuer to manage multiple funding streams for the full buildup of premium. The AIDS Drug Assistance Program (ADAP) Plus Insurance Continuation (APIC) can pay for commercial health insurance premiums for eligible individuals. ADAP is Federally funded through the Ryan White Comprehensive HIV/AIDS Treatment Extension Act of 2009, which is administered by the U.S. Department of Health and Human Services Heath Resources and Services Administration.

Issued by: Centers for Medicare & Medicaid Services (CMS)

Issue Date: October 02, 2013

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