Retroactively Cancelled Insurance After Surgery

[Regis380]

Illinois

As the insured under State of IL Continued Insurance Coverage I schedule sinus surgery. 6 days prior to surgery I went on Blue Cross Blue Shield of Illinois website. I double checked benefits and coverage’s and the site noted my premium was paid through 9/21/11, 2 weeks beyond my surgery date. The day before surgery I was at the hospital and the administrator ran my BCBS card and reported I was good to go for surgery the following day 9/15/11. Had the surgery 9/15/11. The day after (9/16) the hospital called informing me my insurance was cancelled and the procedure was my responsibility ($38K). I called BCBS only to find out my former employer canceled my coverage retroactively to the date I was laid off. BCBS said the employer is within their rights to do so. Isn’t BCBS responsible for notifying me of said cancelation? I never would have had the procedure if it were not for insurance. The former employer has appealed for reinstatement twice, but I don’t have copies and my appeal was denied today.
Unfortunately there is more. When I was let go, I was asked to sign an Exit Agreement. I didn’t sign it as the employer wanted me to wait for 8 months to receive the balance of a sales incentive I had already achieved. I asked what amount would be acceptable to payout now (Aug 2011) instead of waiting the 8 months. I was told that the owner will speak with is lawyer and get back to me. Nothing, my emails went unanswered until the 21st day from when I received the Exit Agreement. I received an email form the attorney informing me that the offer (cash now and delayed bonus) was off the table. Weeks went by exchanging bi-weekly calls and email with the owner for a bit and them just the lawyer. I had no income, they offered a fraction of what was due and I accepted, all along telling them to use said monies to pay my $1,100 State of IL Continued Insurance Coverage (like Cobra). Now I am in need of advice.

 

[FlyingRon]

They are free to cancel your insurance to the date of your termination. If the employer is big enough (20 employees or more) they must inform you of how you can (at your expense) continue your benefits.

 

[cbg]

Actually, no, BCBS does not have a legal obligation to tell you about the cancellation, which as a practical matter they most likely did not even know about until after the surgery. Not in the manner that I think you mean. The insurance carrier and the employer share an obligation to submit to you what is called a HIPAA certificate, and which gives you the first and last dates of coverage. They legally have (if I remember correctly) 45 days from the last day of coverage to submit it. I promise you that the office that confirms insurance coverage prior to surgery is NOT the same office that sends out the HIPAA certificates.

Whether your insurance terms on the last day of employment or the last day of the month following the end of employment, or some other day entirely, is entirely a function of your specific employer's plan document. It is quite common, and quite legal, for coverage to end on the last day of employment. It is also quite common, and quite legal, for communications between the employer and the insurance carrier with regards to new enrollments and terminations of coverage to be weekly, bi-weekly, or even monthly, depending on the size of the population and the method of the transmission of the information.

I hate to keep repeating this, but it was YOUR responsibility, not BCBS's and not even your employer's, to confirm BEFORE the surgery when your insurance was going to end after your layoff. The employer MUST follow the terms of the plan document TO THE LETTER. If the plan document says that coverage ends on the last day of employment, then the employer would be in violation of the law to continue to cover you after that date. But as a practical matter it is simply not always possible to notify BCBS on a daily basis; Okay, today coverage ends for Joe, Bill and Suzie.

If you feel that your employer has violated the plan document (although as I said, it is VERY common for insurance to end on the last day of employment) they are required to make a copy available to you (which may mean the benefits manager reaching behind her chair and pulling one out of a box, may mean contacting the insurance carrier to mail you one, or may mean telling you what page on the company intranet to look at to find an online copy) on request. But if the plan document says that coverage ends on the last day of employment, then that's the ball game. No do-overs, no extra innings.