insurance won't pay

[adevine]

What is the name of your state? IN
Nov 17, 2000, my husband had surgery. He lost his job the day before. Now it has turned up on our credit report that the hospital has turned over the bill to a CA. We did not know the insurance from his employer did not pay as it ran out with the job. Any advice? Thanks.

 

[cbg]

The following assumes that your husband's employer had more than 20 employees.

At the time your husband left his job, you should have received information as to how to continue his insurance at his own expense. This is called COBRA and it is mandatory that the employer provide this information within either 14 or 44 days (depending on how their plan is administered) of the termination of the coverage. Electing COBRA is optional - it is entirely up to you whether you want to do it or not. But unless your husband was fired for gross misconduct (I'm not suggesting he was; just telling you what the law says) the employer was required to make the offer.

The ONLY way you can avoid responsibility for this bill is if you can show that the employer NEVER provided you with option. If they did, and you didn't read or respond to the material, then they have no liability. Their only responsibility is to provide the option. They are not required to follow up with you to determine whether or not you want it. You have 60 days from the date of the notice to make the decision and 45 days from the day you sign the election form to send in the payment. If you fail to do so, the employer has no more responsibility in this matter.

If they did not ever submit the information to you, then they MAY have liability for the bill. You'll have to run that one by the Department of Labor. However, if they did submit the paperwork to your last known address, then they are completely off the hook. They are also off the hook if they can show that they sent it, even if you never received it. For example, if they sent the information to the last address they had on file, but you had moved and not told them (this happens more often than you might think) they are not liable. Essentially they are only responsible for sending the info, not for acertaining that you received it.

I have to tell you that most employers are pretty savvy about COBRA and it's pretty unlikely that they never sent the info out. I can't say it's absolutely impossible, but I have a feeling you're going to be stuck with the bill regardless.

Why in heaven's name did you think the insurance would continue after your husband's employment ended? And did you ever ask whether or how long it would continue, or did you just assume their insurance would pay for the surgery of someone who was no longer employed by them?

If the employer had less than 20 employees, then COBRA does not apply as the employer is not required to offer it in that situation. Should that be the case here, then it's up to state law whether they are required to offer a continuation to terminated (or resigning) employees. Some states do require that. Most don't.

 

[adevine]

I am sure the co. sent the COBRA. This surgery was within 24 hours after downsizing in the co. I didn't expect the insurance to go more than 30 days or until the end of the year, but not the minute these people walked out the door.

 

[cbg]

About 50% of the time the last day of coverage is the last day of employment. The other 50% of the time it's the last day of the month following the end of employment. The COBRA information would have spelled out which was the case. It was your responsibility to read it. If you assumed that the coverage would continue for another 30 days, that was your mistake. It was your responsibility to find out, not to assume.

I don't see any legal way you can avoid paying that bill.

 

[adevine]

He walked out of the office after downsizing, went into the hospital and had surgery within 24 hours. No one in that few minutes when they let everyone go explained Cobra. I thoroughly read and reread Cobra. I appreciate your answers. It was a fluke that has fallen through the cracks. And we are just now finding out about it.

 

[adevine]

cbg, it is strange that we haven't heard anything about this until we pulled a credit report. We had just submitted our card when admitted and haven't heard a thing until now, not even a letter.
The more I think about it,is I am sure the SOL is up for us to do anything, but it isn't for them. I plan to do a little research back through the ole files and see if there was any mention in employee handbooks. and I am almost certain the insurance payments were taken out of our check for the remainder of severence etc.

 

[cbg]

Wait a minute. Are you saying that EVERYONE was let go? Was this a company closing? Or even a division closing? It makes a BIG difference.

 

[adevine]

It was downsizing some of management. It didn't close. It went into a bad nonprofitable period and now is again operating with fewer and less expensive people.
I found the benefit package from back then and it states benefits cease when employment ceases, so they are correct on that. Now I need to review pay stubs and see if we didn't continue to pay for medical for another month. I just feel that we did and it's too late for us now to do anything, but not for them. Otherwise, why didn't we hear about this sooner? It's a fluke. How many have surgery within 24 hours of dismissal? I'm also going to research and see if we COBRAed over. Can you think of any more options? Thank you.

 

[cbg]

Why do you feel it's not too late for them to do anything about it? What is it you feel they should do?

 

[adevine]

I'm the one who should do anything and that is to see if we are responsible or is the insurance and then if we are, try to figure how to get it paid so the hospital gets paid.

 

[cbg]

The insurance is not responsible. It is VERY common for insurance to terminate on the last day of employment, and by your own admission this information was available to you. You also admit that the COBRA information was submitted.

Insurance premiums are rarely if ever deducted from severance payments. It MAY have been deducted from a final paycheck, but that does NOT obligate the insurance company to continue to make payments beyond the last day of coverage. There can be valid reasons why premiums are deducted from the last check; the most common is that coverage began prior to deductions beginning, back when employment first started. But even if it could be proven that insurance premiums were taken from the final paycheck in error, the only obligation would be for the employer to return the premiums to you. It would NOT obligate the insurance carrier to make payment on claims after the end of employment.

 

[presson]

Cool. That's fine. Thanks for all your help.

 

[adevine]

cbg,
Thanks for your input. I get the feeling that you are in the insurance field and have totally misunderstood my question. That you think I was asking how to avoid payment, which is not the case. I am done talking on this forum about it and will go to aid for seniors to see what I should do. Thank you for all that you ahve done.

 

[cbg]

I'm no longer in the insurance field; I have been in the past. However, I've worked with group health insurance benefits for most of my working life, in one way or another, mostly through human resources. Btween working for an insurance carrier, working for a third party administrator and working in HR, I've spent over 20 years working with group health insurance.

Most people who post the type of question you posted ARE looking to avoid payment, although I realize that you never said that was the case. Actually, you made it fairly clear that you were NOT looking to avoid payment. However, that doesn't change the fact that the insurance company is not responsible for the bill and neither is the former employer.

I can't advise you on what to do about payment now. You know what your financial situation is. If the bill is such that you would have trouble making the payment, it is possible (though they are not required to do so by law) that the hospital will be willing to accept partial payments over time. It will be necessary for you to explain that you never saw the bill until now; it's unlikely that they will accept partial payments without understanding that.

Is there ANY possiblity that they billed you in the past (it may have been as long as a year ago) and, assuming that it was being taken care of by the insurance, you disregarded it? I'm not questioning your good faith; I realize that if you did so it was with the honest, if mistaken, belief that the insurance would be covering it. But when you talk to the hospital or the CA, it's a possbility you should be prepared for.