Binder Payment for Individual Membership

On enrolling for an individual health insurance plan, the financial responsible member person needs to pay first month's premium often called as binder payment to complete the enrollment process. The individual membership enrollment is effectuated when the binder payment is received. The binder payment should be received by the billing system and not by the enrollment system. The binder payment is not required during individual membership renewal and reinstatement.

Few health insurance payers send bills to collect the binder payment, whereas few do not send bills to collect the binder payment. In other words, the bill generation process for individual membership is kept on hold by some health insurance payers until the binder payment is received.

Oracle Revenue Management and Billing enables you to create binder payments for an individual membership. For more information on how to create a binder payment, see the Binder Payment Creation section. While creating an individual membership through a health care inbound message or through a membership repricing inbound web service, you must set the Binder Payment Applicability option for the individual membership to either Y or N. You can set the Binder Payment Applicability option to Y only when the following conditions are met:

  • Individual membership status is set to the value specified in the Membership Status Code for Pending Effectuation attribute of the binder payment preference.

  • Membership status reason is set to the value specified in the Membership Status Reason when Awaiting Binder Payment attribute of the binder payment preference.

The system considers the binder payment preference which is specified in the Binder Payment Field Mapping option type of the C1-ASOBLLNG feature configuration.

If the Binder Payment Applicability option is set to Y for an individual membership, it means that the system should monitor whether the binder payment is received before activating the individual membership. On receiving the binder payment for the individual membership, the system only changes the membership and its member persons’ status reason and not the membership and its member person’ status. The membership and its member persons’ status is changed only when the system receives the main subscriber's status update information from the enrollment system through a health care inbound message. However, if the Binder Payment Applicability option is set to N for an individual membership, it means that binder payment is not required for activating the individual membership. For more information about the binder payment monitor process, see the Binder Payment Monitoring section.

If the Binder Payment Applicability option is set to Y for an individual membership, you need to specify the following binder payment details through a health care inbound message:

  • Grace Days - Used to calculate the grace date for the individual membership.

  • Binder Liability Amount - Used to specify the binder liability amount. This data is required when the Consider Binder Liability Amount attribute is set to Y in the binder payment preference.

  • Threshold Percentage - Used to specify the threshold percentage using which the threshold amount should be calculated.

  • Hold Billing - Used to indicate whether you want to hold the bill generation process for the individual membership until the binder payment is received.

The system facilitates you to validate binder payment against the threshold amount. If the Consider Binder Liability Amount attribute is set to Y in the binder payment preference, the system calculates the threshold amount for the binder payment using the binder liability amount and threshold percentage. For example, if the binder liability amount is set to 50 and threshold percentage is set to 20, the system sets the threshold amount to 10 (i.e. (50*20)/100). The system can receive one or more binder payments for an individual membership. If the Consider Binder Liability Amount attribute is set to Y, the system must receive the binder payments whose sum is equal to or greater than the threshold amount. However, if the Consider Binder Liability Amount attribute is set to N, the system does not calculate the threshold amount for the binder payment. In such case, the system must receive a binder payment with the amount greater than zero.

On editing the binder liability amount and threshold percentage for an individual membership, the system recalculates the threshold amount for the binder payment. On creating a billable charge for an individual membership where the Hold Billing option is set to Y, the system will set the bill after date in the billable charge to a far future date (i.e. 12-31-2099).

Parent Topic: Individual Health Insurance