Insurance benefit question

Oregon
Hi, I have a question regarding a situation wherein my employer switched healthcare providers without prior notification to any of the employees. My wife, who is covered underm y plan, was in the middle of a dental crown procedure at the time. Crowns are a two part procedure. She had the first part under the coverage of the old insurer, the second under the new, by necessity. We had no chance to finish it under the old. My employer assured me, verbally of course, that there was a rider to cover this situation. Turns out there wasn't a rider and both insurance carriers have refused to pay (apparently legally so). Now, my question is, do I havve any legal recourse here to get my employer to pay the amount still owed (the amount the insurance should have paid) since they led me to believe the procedure would be covered, and have a fiduciary oblication to administer the plan responsibly? Or is there other grounds I can stand on in this case? Any help most appreciated.

Lotus123

I sincerely doubt it.

An employer is entitled to change providers. Failure to do so, in fact, may result in their being charged higher rates than one who regularly goes out to bid. (You mention fiduciary responsibility - it is NOT fiduciarally(?) responsible to neglect to look for better rates with other carriers.) Whether they are required to provide you with any notice, and if so, how much, is state specific and I do not know the law for your state. However, in most states the only REQUIRED notice is from the carrier to the employer, not from employer to employee. There's a reason for this, by the way. As an example, in my state the required notice is 30 days - that is, 30 days before the change in rates (which is almost certainly what triggered this change - changing carriers is a pain in the neck for the employer as well as the employee and they're not going to do it if they don't have to) the carrier must provide the employer with the new rates. HOWEVER, the employer then has the right to negotiate with other carriers, try to get the original carrier to lower the rates, and do whatever they need to to get the best possible rates for the upcoming plan year. By the time they've found the best possible rate, most of the 30 days may be up. You can check with your state insurance commission as to any requirements for notification in your state. Note that the 30 days in the example are based on the requirements in my state; yours may require more time, less time, or none at all.)

It is a standard of any dental plan that they will not cover any procedure that was started under a previous plan. I've NEVER in all my years of working with employer sponsored plans (close to 25 years) seen a dental plan that would pick up a major procedure in mid-stream. The employer DOES NOT have the ability to delay the change of rates until any procedures already in place are completed. Nor do they have the right to force the carrier to provide a rider for such procedures. It is simply not reasonable for them to pick up a sizeable increase in premium in order to make sure your bills are picked up.

I can't think of any way they have a legal obligation to pick up the balance of the bill.

Thanks for the info!

I was afraid of that.

Just one more question...if they told me that it was covered, e.g., by a special rider they had negotiated with the new carrier, when in fact it was not covered, would there be a case for fraud (i.e., the misrepresented my coverage to me)?

Or something along the lines of taking my money for the benefits with the understanding that I would have full benefit coverage during the period in which I paid for the benefits, but then failing to deliver on what I paid for?

Any advice much appreciated

No, this is neither fraud nor misrepresentation. Having been there many times, I have no doubt that your employer honestly believed that they would be able to provide this benefit. They should not have told you it *would* be covered until they already had it lined up (or found that they could not) but to have a case for fraud, you would need to be able to show that they deliberately misled you, KNOWING that no such rider would be available. Fraud is not my area of expertise but I believe you would also have to show that they did so in order to encourage you to take a benefit that you would not normally have taken.

If you had any kind of case like you're describing, I would have told you. Believe me, I've dealt with this from the insurance carrier's side of the desk, the employer's side of the desk, and believe it or not, the employee's side of the desk too. (Hey, us HR people are employees too; we get the same benefits as everyone else.)

Sorry, but you just don't have a casde against your employer.

Again not the answer I want ;-)

But I appreciate you taking the time to consider my questions!

I'm rather angry about this whole thing (I know, I know, that and a cup of coffee will get me a $1.25...).

And yes, the HR person at this company is also a decent person. She doesn't like the situation any better than I do and has been most helpful. So believe me, I know it's not HR's fault when they have to deliver bad news...

Again, thanks so much for your help...

I understand how you feel, and don't blame you in the least for it. But for your own sake, try to look at it this way (follow along with me please):

1.) Your employer has no choice about when the rates change. When the plan year is up, it's up.
2.) The employer has no control over what rates are offered by the original carrier.
3.) While I have no way of knowing what kind of increase you received, I can tell you truthfully that an increase in single digits is increasingly rare; increases in three digits are not unheard of. My last year as an HR manager (before I turned to consulting) the increase in my company's rates was 14%, and that was when the economy was still strong and increases were not as high on an overall basis as they are now. The previous year, I had a 47% increase!
4.) Increases these days are out of control. Many, many employers are having to cut benefits, increase the employee's share of premium, or both, just to keep from cutting benefits altogether.
5.) Your employer had to do one of the following; cut benefits to keep the premium down for everyone which meant your bill would not be covered; or cut the benefit you were using in order to keep the premium affordable for everyone. (Honestly, what would YOU have done?) It isn't their fault no rider was available; they made an error in judgement in telling you they'd get you a rider before they investigated but they can't force an insurance carrier to provide one.
6.) They did the best they could. They COULD have dropped dental benefits altogether.

They probably feel as badly as you do. It sounds as if they bent over backwards to try to accomodate you.

Best of luck.