employer health care insurance ethics issues

[fred26]

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

I recently was laid off by my employer and had the option to continue my health insurance plan with COBRA, which I took. Over the next 3 months I paid my COBRA payments to my former employer with the knowledge I was covered. The checks were being cashed on regular basis, so I didn't think twice. I then received a letter from the insurance provider stating that in fact that my policy had been terminated due to non payment by my former employer, dating back to 2 months from the time I received the notification. So for at least 2 months, my former employer has been taking and cashing my COBRA checks without making payments on the insurance policy and not notifying me of the situation.

When confronted with the fact that my claims from this now uninsured period would now not be covered, the former employer offered to pay me for the amount of my claims during this time, knowing that it would be far cheaper then to pay the amount required by the provider to reinstate coverage for the 2 months of non-payment.

My question is, by proposing this, was my former employer asking me to engage in a form of insurance fraud? or at the very least, an unethical arrangement?

Thanks so much

 

[cbg]

How much money are we talking about? Is it more or less than the cost of the premiums you paid?

It's not insurance fraud per se, but that's as far as I'm prepared to go without more info.

 

[fred26]

The claims are less than the premiums paid. My claims for the 2 months in question are in the 2-300 dollar range. The total premiums over the two month period were around 2k total; I paid roughly a third of that per my COBRA arrangement, putting my payments just north of 700.00, with the employer responsible for the remaining 2/3, which it turns out they never paid.

hope that helps,

Thanks

 

[cbg]

Ideally, the employer should reimburse you for the premiums paid, and have you repay the insurance carrier for the claims paid in error.

Has the policy been reinstated? Or is it still canceled?

 

[fred26]

The policy is still unpaid at this point to my knowledge, so it leaves me with over 700.00 paid out to my employer for the COBRA, but since they took that money and never paid the premium,in turn leading the provider to cancel the policy, I'm stuck with the now 2-300.00 of unpaid claims.

 

[cbg]

You have two options:

1.) Accept the employer's offer.

2.) File a complaint with the US DOL for a potential ERISA violation.

It's up to you whether the difference between the premiums paid and the claims are worth it.