Direct Pay status means SHBP is directly billing a participant for coverage and premiums are collected by SHBP via ADP’s subcontractor, Wex. SHBP directly bills certain Retirees, and all Former Employees enrolled in State Extended Coverage and COBRA Participants.
There are a number of reasons why Retirees are directly billed for their SHBP coverage, meaning their monthly premium is not deducted from their annuity, including:
- If an employer fails to timely and correctly notify SHBP that a Retiree or Pending Retiree “Terminated employment due to Retirement”
- If a Retiree’s or Pending Retiree’s premium amount is more than $690.00 per month in Plan Year 2024;
- If the annuity a Retiree or Pending Retiree is receiving from his/her retirement system is not enough to cover their SHBP premium amount;
- If a Retiree or Pending Retiree retires late and their retirement system has already completed their monthly retirement payroll resulting in his/her SHBP premium not being deducted from their annuity;
- If a Retiree’s or Pending Retiree’s retirement is approved after his/her retirement system has already completed their retirement payroll resulting in his/her SHBP premium not being deducted from their annuity;
- If a Retiree or Pending Retiree retires and his/her retirement system mistakenly omits deducting their SHBP premium from their annuity;
- If a Retiree or Pending Retiree retires and SHBP mistakenly omits providing his/her premium deduction amount to their retirement system;
- If a Retiree’s enrollment in an SHBP Medicare Advantage plan option is terminated. See Quick Tips for What Not To Do When You Are Age 65 or Older; and
- For many other reasons which is why SHBP will bill Retirees or Pending Retirees directly in these instances.
If you are placed on Direct Pay status and you fail to pay the Direct Pay premiums to SHBP, your coverage will be terminated with no right to reinstatement unless you return to work in a benefits eligible position with an SHBP Employing Entity.