Health insurance cancelled, not notified

[JS]

I am in New Jersey. In August 2000, I left my job and took benefits under COBRA with direct billing from the insurance company. I have paid my premiums and used my insurance since then. Recently, I tried to use my card and it was rejected. I called the insurance company and they told me the group policy had been cancelled by the company on February 6, 2001 retroactive to October 15, 2000. They said they could offer me insurance, but I would have to pay the new premiums from October to present again to have continued coverage. An application was supposed to be sent to me in 7-10 days and I have yet to receive it. In addition, the company I worked for has been sold. The company name and corporation are still in existence, but the new owners say I am not entitled to COBRA benefits through them. They have transfered the employees to their group policy. I am concerned that I have no insurance, the money will not be refunded to me or applied to the new policy and that claims previously honored will be rejected after the fact.
These are my basic questions:
Can my ex-employer, new owner or the insurance company cancel my coverage without notifying me?
Can the cancellation legally be back dated when I've paid the premiums?
What do I have to do to get my payments refunded or applied to a new policy?
Do I have any recourse if I suffer real damages such as rejected claims or money not being refunded/applied?
I do have other questions, but I'll ask them later if necessary. Thank you for your help.

 

[ALawyer]

If the old company went out of business, or failed to pay premiums, you have a problem.

If the old corporation's assets were sold, instead of the corporate entity itself, there may be no claim against the new employer as it did not buy the relationship or obligations stemming therefrom.

I suggest that you contact the NJ state labor department and NJ insurance speartment and ask if they can help you. But if you qualify for new insurance, you may be better off with it. As for retroactive COBRA, you'd have to pay back premuims, just as you would have had to pay premuim all along, and just because the firm failed to notify you would not excuse payment.

 

[JS]

Thank you!

Thanks for your response, ALawyer.
Here's the update.
I have received a statement showing credit of my payments on my account. I also finally got the application I was promised on Friday. I have completed the application as instructed, typed a letter explaining the situation and will mail it tomorrow along with copies of documentation.
The only thing that still concerns me is I got a notice ( the first of what may be many) that a claim that was honored months ago was rejected. I addressed this in my letter to Aetna and enclosed a copy of the notice.
I'm afraid that my doctors and pharmacy will think I tried to pull a fraud on them and they won't be paid. I don't want to suffer the embarrasment or financial problems that back dated claim denials will cause.
In your opinion, should I contact a lawyer and have all this correspondence go through them or should I continue on my own? As I may have said before, my only concerns are that I do not suffer the loss of no continued coverage and claims previously honored being rejected. Please be assured that I understand that I will have to pay the premium increase from October to date. While it may be a financial hardship, it is worth it to have continued coverage.
Thank you again, ALawyer. You help is appreciated.
Jen

 

[ALawyer]

I'd just drop a short note to the doctors explaining the company had mistakenly stopped the coverage, and that it has been corrected, and if their payment was delayed it is now coming, and you're sorry for the mutual inconvenience if you feel a need to explain. As MANY doctors use practice management concerns to do the billing, my sense is the docs never even know what's going on and their receptionists are the ones who may ask you.

 

[monicaT]

I have worked in the health insurance industry for 20+ years as a Regional Service Manager and as a Case Manager. I'm also an expert witness for the Courts for Benefits, Compensation and Claims. I can assure you that your doctor knows nothing about the status of your COBRA. The problem you've experienced is what the insurance industry refers to as a "billing problem" that became an "eligibility problem." It's the most common problem a customer service rep encounters -- especially with COBRA policies.

Just give your medical group's Billing Dept. a call and tell them that you had a problem with your eligibilty because your COBRA premiums weren't being credited properly. The Billing Dept. knows all about COBRA billing problems. Tell them the problem has been taken care of and TO RESUBMIT ANY CLAIMS THAT WERE DENIED DURING THAT PERIOD of time. You also might want to call Aetna's Member Services Dept. and alert them that the claims are being resubmitted for payment, so that the Claims Dept. will see the computer history note that your phone call will generate (it helps if they know the Insured is involved and aware). Insist that the claims' department process your unpaid claim(s) on a rush basis because of the circumstances. Be assertive with them and they will do it.

Don't worry about the pharmacy. Rx's are declined all the time in pharmacies.... for reasons too numerous to mention here. They probably don't even remember anything about the incident. Rx's being declined happen too frequently for the pharmacy staff to pay much attention to it.

You are also entitled to a reimbursement from Aetna for your out-of-pocket expense for the declined Rx. You should have a reimbursement form in your COBRA kit. If not, call Aetna's Member Services Department and ask them to send you one or two of the forms. The form is self-explanatory.

Good Luck!