"Secret" Policy Changes?

[bikernoj]

What is the name of your state (only U.S. law)? Colorado

I have a situation where my employer arbitrarily changed my family's health insurance policy at the end of 2010, but did not inform me until Jan 16, 2011.

On Jan 12, 2010 my wife had eye surgery, and at that time we paid what we believed to be the correct deductibles under our policy. Over and done!

However, we have now received a bill for an additional $1400 that we must pay out-of-pocket, since the new "spending account" plan we were forced into does not have any funds.

I did not do anything wrong and I believe that I should not have to pay for charges resulting from the actions of my employer, especially when they failed to inform us beforehand that our plan would be changing.

Aren't companies required by law to take responsibility for situations like this? Why should I now have to pay extra due to my company's decision and failure to inform me?

When I asked about this to HR, I was told, "The company is NOT going to pay your medical bill!", and that if I pursued things further that I would "only make enemies in the company." Almost as if they know it's not right and are making threats?

I will not stand by and allow them to do something illegal! What can I do about this situation?

ThanksWhat is the name of your state (only U.S. law)?What is the name of your state (only U.S. law)?What is the name of your state (only U.S. law)?

 

[pattytx]

You were forced into contributing to a Flexible Spending Account? How did that happen?

 

[bikernoj]

Timeline

OK, here's a timeline to clarify things a bit better.

I was employed by my company in March 2010. At that time there were two options available for our health insurance: a standard PPO and a "spending account" FSA. As the PPO was the better option for my family, that is the one I chose.

As previously mentioned, my wife saw an eye doctor in November 2010 and had surgery scheduled for Jan 12, 2011. At no point was I given any indication that our PPO coverage might change, and by Dec 31, 2010 no one had been given any information regarding open enrollment for 2011.

On Jan 11, the surgery clinic contacted our insurance provider to verify coverage and what our payment would be at the time of the surgery. The clinic even left a message for us stating this. On Jan 12 we came in, paid the copay & deductible amounts the clinic verified the day before, and my wife had her surgery. Hooray! Paid for and done!

But then on Jan 15, we received a letter in the mail from the insurance provider that stated our plan had either been a) changed or b) canceled, with no further explanation.

Wen I returned to work that following Monday, I contacted our HR people and asked about our insurance coverage for 2011. I was told that they were coming to our office on the 18th to tell everyone what was going on.

When HR arrived, we were told that the PPO plan was no longer an option, and that all employees were automatically transferred to the sole "spending account" option, and we had a week to sign for it.

This was the first time I had heard that my PPO plan was no longer in effect, and my company had made this decision on Dec 31, 2010 without informing us until Jan 18, 2011.

To be technically correct, no one held a gun to my head and forced me to sign the paperwork for the HSA plan; but when that is the only option given and it's either that or no insurance at all, there isn't really a choice.

So I still would like to know if my company can be held liable for the additional expenses we have incurred from the surgery as they failed to inform us of their decision in a timely manner. Had my PPO plan continued we would not owe anything more, and up to Jan 15 there was no indication that our coverage had changed at all.

It just seems reasonable to me that if the company's decision is the primary cause of our expense, then they should be held responsible for their actions, no?

 

[pattytx]

You have to affirmatively opt into an Flexible Spending Account and indicate the amount you pledge to contribute. How much did you pledge for 2011?

I'm going to let cbg handle this one from here on out.

 

[cbg]

Had you known on, say, December 18 that the PPO was no longer an option, what would you have done differently?

 

[bikernoj]

planning

Well, had we known ahead of time about the policy change we would likely have postponed the surgery. Under the PPO, we knew exactly how much the deductible + copay was going to be and prepared accordingly.

Not to keep hammering a point, but does anyone know if companies are required by law to provide say, 30 days notice prior to any health coverage changes? Did my company violate any laws?

On a somewhat related note, if I was not presented with a different option until after the surgery, is my company required to continue the PPO plan we were on until the 18th?

 

[cbg]

No. They are not required by law to provide any particular length of notice of changes.

No. They are not required by law to continue the PPO plan until it is more convenient for you.

This was badly managed and badly handled but no laws were violated and the employer is not legally obligated to pay your medical bills. If you ask them NICELY they might be willing, under the circumstances, to pick up some or all of them but the law is not going to compell them to do so.

 

[bikernoj]

Just seems WRONG

That's disappointing news, and does not make sense.

Random analogy: You just bought new tires for your car. A week later you witness a person walk up and puncture all four of them. Even though you just paid for new tires, you are now burdened with the extra expense of buying four more due to the actions of this person. Is this person liable to cover the damages?

Current story: We were covered under a policy and had just paid for a surgery according to that policy. A week later we are informed that our policy had changed without warning, and are now burdened with $1400+ of extra expense due to the actions of my company. Why are they not liable to cover the resulting damage?

I just want to be very clear that we would NOT have any additional surgery expense were it not for this arbitrary, uncommunicated change. I have tried discussing the situation with HR to reach a friendly resolution with no success. Their tone is basically, "Our decision costs you money? Sucks to be you, and we take no responsibility for the results of our actions!"

It all seems obviously wrong, but there aren't any laws protecting people from situations like this? WTF?

 

[cbg]

No. There are no laws protecting people from situations like this. I'm sorry, and I wish I had a better answer for you, but the fact is that the government simply does not get as deeply involved as this with how the employer manages his business. It is not illegal to be a bad manager.

FYI, PPO's are extremely expensive from the employer's point of view; it is absolutely not outside the realm of possibility that HR/Benefits attempted to negotiate the costs down with the carrier, were unsuccessful, and that is the reason behind the delay in notification. Bad management as I said, but not a violation of any laws.

 

[CSO286]

That's disappointing news, and does not make sense.

Random analogy: You just bought new tires for your car. A week later you witness a person walk up and puncture all four of them. Even though you just paid for new tires, you are now burdened with the extra expense of buying four more due to the actions of this person. Is this person liable to cover the damages?

Current story: We were covered under a policy and had just paid for a surgery according to that policy. A week later we are informed that our policy had changed without warning, and are now burdened with $1400+ of extra expense due to the actions of my company. Why are they not liable to cover the resulting damage?

I just want to be very clear that we would NOT have any additional surgery expense were it not for this arbitrary, uncommunicated change. I have tried discussing the situation with HR to reach a friendly resolution with no success. Their tone is basically, "Our decision costs you money? Sucks to be you, and we take no responsibility for the results of our actions!"

It all seems obviously wrong, but there aren't any laws protecting people from situations like this? WTF?

Your random analogy is a faulty argument. Given that the person who punctured the tires caused you additional expense by commission of a criminal act, he should be held liable for the damage and expected to rectify the situation.

In your situation, nothing criminal was done.

 

[bikernoj]

Your random analogy is a faulty argument. Given that the person who punctured the tires caused you additional expense by commission of a criminal act, he should be held liable for the damage and expected to rectify the situation.

In your situation, nothing criminal was done.

Technically, an analogy is not a faulty argument as it's purpose is simply another way to get the point across, not a means of providing evidence.

Of course, the point being made is that since the extra money comes out of my pocket due to my company's actions, it sure FEELS criminal! I don't know how I'm going to get another $1400 for this.

Thanks to everyone who looked into this for me.

 

[CSO286]

Technically, an analogy is not a faulty argument as it's purpose is simply another way to get the point across, not a means of providing evidence.

Of course, the point being made is that since the extra money comes out of my pocket due to my company's actions, it sure FEELS criminal! I don't know how I'm going to get another $1400 for this.

Thanks to everyone who looked into this for me.

FEELING criminal and BEING criminal are two very different things.

 

[blueturnaround]

I didn't read all the replys, just the OP and a few saying no laws were broken. I'd say some laws may have been broken... Plans MUST disclose information to plan participants.

U.S. Department of Labor - Find It By Topic - Health Plans - Plan Information

"If a plan is changed, participants must be informed, either through a revised summary plan description, or in a separate document, called a summary of material modifications, which also must be given to participants free of charge."

Not sure exactly which categories your employer falls under...but tell HR your story and request that they pay for some of your medical costs. You were financially burdened because benefits information was not provided to you...so therefore you couldn't plan accordingly.

P.S. - might not have a leg to stand on...just looked up the SPD requirments...your employer did not violate the time frame for issuing the SPD. They have 210 days from the end of the plan year to do that....or usually about 1 year plus 210 days. If this is considered a "material reduction"...they have 60 days from the adoption date of the reduction.

 

[cbg]

All of which I took into consideration before replying. The SPD was not changed; the plan was removed as an option. But even if it were a change to the SPD, it does not appear to be relevant to the poster's situation since the time limits were not exceeded.

 

[blueturnaround]

My bad, I should have read everything.

Sorry to the OP...hope it works out for you.