Insurer claims we're not covered?!?!?!

[rvill]

What is the name of your state? What is the name of your state? TX

(My family recently moved to FL; but all this happened in TX within the last year!)

I'm writing on behalf of my parents, who don't know much about this except that they STRONGLY feel they don't owe anything...

My father spent some time in the hospital last year due to a heart condition. He turned in his insurance paperwork and what-have-you, and expected it to pay the respective bills.

Turns out that soon afterward, my dad's employer declared bankruptcy. And soon after that, the hospital sent my folks the bill for the stay (more than $13,000), saying that our insurer had declined the bill.

My father couldn't believe that the bill wouldn't be covered, and called them himself. They said that he had not been covered for quite some time (I assume weeks/months; but certainly long enough so that the hospital bill and what-not was declined). They said that he was responsible for the bill.

Here's where it gets crazy. My father had been paying for coverage out of his paycheck for months, and he's got proof of that. He, my mom nor I have no clue what happened. It was a lot of money (per paycheck) that he was paying for coverage, and all of a sudden he was told that he wasn not being covered...

So I have a couple of questions...

1. If my father went into the hospital in good faith that he WAS being covered, and his paycheck DID include deductions for health insurance, then isn't the onus on the employer/insurer?

2. Isn't there a "good faith" clause or something like that, where if a consumer's paying for something in good faith he's entitled to receive said item?

3. If for whatever crazy reason he's told he has to pay the bill, can he then get the money he was deducted for healthcare out, even if his employer went bankrupt?

4. If he does have to pony up, can/should he consider legal help?

5. If #4 is yes, would the fact that he recently moved impact the case in any manner?

-----

Thanks for whatever's said. I myself am a college student in OH with enough bills of my own (educational, that is) to deal with, and feel that he shouldn't have to pay anything... But I'm a history major, and this obviously isn't my strength.

Thank you very much for whatever advice you suggest.

Have a wonderful day,

Miguel Villafana
Oberlin College c/o '04

 

[I AM ALWAYS LIABLE]

My response:

The health contract was with, and between, the insurance company and the employer. Your father was not in "privity of contract" directly with the insurance company. Your father was merely a beneficiary of benefits under the employer's health contract.

Since it's obvious that the employer was "stealing" the insurance premiums, and not paying the insurance company, the employer breached the insurance contract. Thereafter, the insurance company canceled the health contract. The insurance company notified the employer, but the employer didn't inform your father; rather, they just kept taking the money from your father.

Your father has a legal "bone to pick" with his former employer, and not the insurance company.

In the meantime, your father is "on the hook" to the hospital, and he should see an attorney about an action for "Fraud" against his former employer.

IAAL

 

[rvill]

responding to reply

My father went in for hospitalization in October of last year, but coverage--according to his HMO--apparently expired in May, 2002.

That's 5 months...

5 months?!?!?! I know for a fact that his check was reduced for healthcare coverage, or so we thought...

So you genuinely believe there's a case for fraud here?

Good night,

Miguel Villafana

 

[JETX]

The employer simply 'stole' the money from the employees and presumably didn't pay the premiums. Ergo, no insurance coverage.

However, there is a HUGE problem in all this. From your first post, "my dad's employer declared bankruptcy".

If the employer was a corporation, it is likely that there are little or no assets to go after. If this was a dba, proprietorship, etc., you will need to go after the individual owner(s). And since this was fraud, the debt could be excluded from their bankruptcy.

 

[Beth3]

rvill, your father should also contact the federal Department of Labor. Fraudulently deducting insurance premiums from employees and misappropriating the funds is a violation of federal laws (ERISA.) It's the kind of thing company owners go to jail for.

If your father had a retirement plan with this employer, chances are there are problems there too. If they didn't have money to pay the health insurance, they didn't have money to fund the retirement plan either. Your dad should discuss that with the DOL too, especially if he was deferring salary into a 401(k) or similar retirement vehicle.