Insurance Claims Rejected...

[ajay92]

Hi,
I am covered for Health Insurance Plan by my company. However my employer covers my family under the same plan at a cost, which is deducted from my salary on a monthly basis.

My wife delivered a baby boy on 10/11/01 through a Cesearian section.

To my surprise I found that the insurance company sent back claims worth $ 15000 to the providers citing that the employer had cancelled the plan and hence they could not pay as it was a self funded plan. As per them my employer had not paid them as per the policy terms.

My company changed insurance plan from 12/01/01. I have started receiving notices from Collection agencies reg collection of claim amount.

I am in a fix. What are my options at this time ?
As far as I am concerned there was no break in the insurance and I have paid monthly insurance premium for my dependents to my employer...Is there any legal option available ?

 

[RunningOnEmpty]

Have you spoken with your employer about this?

What did they say?

 

[ajay92]

My employer keeps on telling me that he is following up with the Insurance Company. I cannot wait as I have to respond to the legal notices. What would be my legal options ??

 

[I AM ALWAYS LIABLE]

My response:

Your only real alternative is to see a local attorney to discuss the potential of suing your employer for Breach of Contract and Breach of Fiduciary Duty. You see, your employer was in privity of contract with you by acting as your "agent" to take out money from your paycheck to pay to the insurance company. This constitutes a written agreement. They had a contractual responsibility, as your "agent," to pay the insurance company, and to inform you of all changes; e.g., inability to pay, or cancellation. They breached your trust, and their "duty" to you, by not informing you of the situation, and as a result of their breach, are now causing you untold damages; both financial, and emotional distress.

Unless your employer completely rectifies this situation within a couple of days, you need to "save" yourself by seeing an attorney.

IAAL