Health Insurance

[gentleman jack]

I reside in the state of Alabama. My employer is a small company(10 employees) in the state of Tennessee. On offer of employment (Feb 01) I was offered family health insurance. The coverage was with a large National Insurance Company. After non payment of several medical claims, we find out in Aug 01 that we are covered w/in the state of TN, but all claims w/in AL are considered out of network and will be paid at a significantly lower rate. Because the coverage is for the National Insurance companies TN subsidiary. I asked my employer about this, he said the agent that sold him the policy assured him, I would be covered w/in AL. In the time between Feb and Aug, my wife has become pregnant. We are not able to move to a different policy b/c of the pre-existing condition. My employer looked into to changing policies but b/c its a small company, the rate for him is cost prohibitive. He basically expects it to come out of my pocket. My employer and the agent who sold him the policy have basically told me tough luck. I have demanded that both parties make things right, but have had no response.

1. Is there a legal remedy to this situation.
2. If so, who is liable, employer, insurance agent, insurance company?
3. Is it worth the time and effort, right now I would be satisfied with complete coverage. If I have to deal w/ it much longer, I feel damages are in order.
4. would legal action need to be filed in TN or AL?
5. I have filed a complaint on the agent to the TN dept of insurance, is there anything else I can do along these lines.

Sorry for the length. Complicated situation

 

[cbg]

First of all, if you are talking about moving to another group plan, under HIPAA pregnancy CANNOT be considered a pre-existing condition. That's Federal law. If you are talking about moving to an individual plan, that may be another story. Let me know if that's what you mean and I'll see what I can find.

The insurance carrier is not liable unless there was an insurance company rep present when your employer and the broker explained the plan to you and the rep failed to correct them when they said you would be covered in network out of state. Except in that instance, they are not responsible for the agent misleading you. They also cannot really be held to changing their policy unilaterally. That doesn't mean they won't eventually end up paying it, but legally they can't just across the board pay you for something that's not covered.

I also suspect that you won't have much luck taking action against your employer, who almost certainly was depending upon the agent for his information. If the insurance commission is unable to assist you, I think your best bet is to file a complaint against the agent, which may or may not include legal action. It was HIS responsibility to see that the information he provided was correct.

Even if this eventually goes in your favor, I very much doubt that you will receive damages, no matter how much you may think they are in order. I could be mistaken, though. When I was working for a national insurance carrier we had a situation very like this; however I left the company before it was settled so I don't know the details.

 

[gentleman jack]

Thanks for the reply.

My employer and his agent apparently explored moving to a different group policy that had nationwide coverage. They pressured me to answer negatively to the "Are you or a member of your family pregnant" on the new company application. I refused to answer negativley. According to my employer, they elected not to go with a new policy for everyone b/c the pregnancy caused the group rate to increase substantially. My company only employs 8 or 10 people.

I did not think I would have much luck with the insurance company. We did ask for a coverage book and a list of eligible physicians, the insurance company replied with information for the state of AL. Is there anything in that sequence of events that might cause them to be on the hook?

I realize that damages are wishful thinking. Sad to say but it looks like I'm the one who is going to pay for the mistakes of others.

 

[cbg]

The pregnancy CAN cause an increase in the rates if they change carriers. It CANNOT be considered a pre-existing condition, by which I mean they cannot refuse to cover the pregnancy.

The fact that they sent you a provider book for the state of AL still does not make them responsible for the fact that your broker gave false or misleading information. They may have a network in AL - that does not mean that your plan is automatically covered on it.

You may, at least initially, be the one on the hook, but I wouldn't give up on the idea of pressing the issue with the broker.