Employee Was Enrolled in the Wrong Health Insurance
My question involves labor and employment law for the state of: NC
Over last two years, my current employer has offered 4 health insurance options (plans are self-insured or self-funded) - Plan A (monthly employee contribution $0), Plan B ($70), Plan C ($80), Plan D ($150). Plan C is Plan B + hospital indemnity insurance from colonial life. I was offered Plan A, B, C & D for 2017 & Plan A, B, & D for 2018. I signed up for Plan C for 2017 & Plan D for 2018. Both years my employer deducted $80/month (for Plan C) but mistakenly enrolled me in Plan A. During this time, insurance administrator rejected insurance claim (as it was not covered by Plan A but covered by Plan C & Plan D). Also, I paid in cash (without insurance) for other health services as those services were not covered by Plan A.
Recently, I found out about possible mistake & informed my employer. Without my consent, over my objection & without advance notice, my employer has retroactively 1) cancelled my coverage from Plan A & 2) enrolled me in Plan B backdating it to 1/1/18. I haven't informed them about 2017 as I'm waiting for documentation (for proof) from insurance administrator. I want employee contribution refunded & prospectively enrolled in Plan D or Plan B (as entire required employee contribution was not deducted for Plan D).
Rescissions are prohibited (except for fraud and intentional misrepresentation of facts) under the Affordable Care Act by federal regulation 45 CFR 147.128: Rules Regarding Rescissions. https://www.law.cornell.edu/cfr/text/45/147.128 As per my understanding, my employer cannot retroactively cancel my Plan A coverage. As a result, they cannot retroactively enroll me in Plan B & must refund employee contribution.
Is my employer allowed to retroactively cancel my coverage & enroll me in different plan?
Is my understanding regarding this matter correct?
What recourse do I have?
Re: Wrong Health Insurance
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N0name
mistakenly enrolled me in Plan A.
You should have been on top of that and caught the mistake when it happened. Makes me wonder what else you aren't paying attention to with regards to ANY kind of insurance, not just medical.
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N0name
Rescissions are prohibited (except for fraud and intentional misrepresentation of facts) under the Affordable Care Act by federal regulation 45 CFR 147.128: Rules Regarding Rescissions. As per my understanding, my employer cannot retroactively cancel my Plan A coverage. As a result, they cannot retroactively enroll me in Plan B & must refund employee contribution.
What did your employer say when you brought that to his attention?
Re: Wrong Health Insurance
What action did you anticipate your employer taking when you brought the matter to his attention? If you did not want him to correct the error, what was your purpose in telling him of the mistake?
Those are real questions, not arguments.
Re: Wrong Health Insurance
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adjusterjack
You should have been on top of that and caught the mistake when it happened. Makes me wonder what else you aren't paying attention to with regards to ANY kind of insurance, not just medical.
I don't know how I could have known that mistake was made. My employer doesn't have website for employees. Document provided at the time of open enrollment has only 5-6 pages. Insurance administrator's website is rudimentary & doesn't have documents such as "Summary of Benefits", "Evidence of Coverage", etc. Insurance card has Plan ID # (alphanumerical) but no Plan name. I figured out mistake after I received "Explanation of Benefits" rejecting the claim.
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adjusterjack
What did your employer say when you brought that to his attention?
I found out about 45 CFR 147.128 today. Intend to email my employer on Monday. Previously they have taken 30 - 35 days to respond to my email. I want to make sure what they are doing is allowed or not.
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cbg
What action did you anticipate your employer taking when you brought the matter to his attention? If you did not want him to correct the error, what was your purpose in telling him of the mistake?
Those are real questions, not arguments.
At that time, I wasn't 100% sure that they had made the error. I requested them to check if I'm enrolled in correct plan. They replied informing me that they have enrolled me in correct plan & backdated it.
Backdating insurance coverage cannot resolve this matter as I can’t go back in time to receive health care or change choices I was forced to make in regards to receiving and paying for medical services due to lack of coverage as a result of this mistake.
Right now, 1) I have paid employee contribution, 2) neither received nor will be able to use services that I have paid for & 3) had to pay for covered services out of my pocket due to rejected claim.
Re: Wrong Health Insurance
I'm not sure that this would be considered a rescission of coverage given that they did not simply cancel coverage; they also re-enrolled you in the proper plan. I do employer benefits for a living but this is definitely one that I would kick upstairs to our compliance unit; I'm honestly not sure what the proper actions would be here. Tax, what are your thoughts? Mr. K.?
Re: Wrong Health Insurance
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cbg
I'm not sure that this would be considered a rescission of coverage given that they did not simply cancel coverage; they also re-enrolled you in the proper plan. I do employer benefits for a living but this is definitely one that I would kick upstairs to our compliance unit; I'm honestly not sure what the proper actions would be here. Tax, what are your thoughts? Mr. K.?
Interesting point.
As per 45 CFR 147.128 -
"A cancellation or discontinuance of coverage is not a rescission if -
(i) The cancellation or discontinuance of coverage has only a prospective effect;
(ii) The cancellation or discontinuance of coverage is effective retroactively, to the extent it is attributable to a failure to timely pay required premiums or contributions (including COBRA premiums) towards the cost of coverage;
(iii) The cancellation or discontinuance of coverage is initiated by the individual (or by the individual's authorized representative) and the sponsor, employer, plan, or issuer does not, directly or indirectly, take action to influence the individual's decision to cancel or discontinue coverage retroactively or otherwise take any adverse action or retaliate against, interfere with, coerce, intimidate, or threaten the individual; or
(iv) The cancellation or discontinuance of coverage is initiated by the Exchange pursuant to § 155.430 of this subchapter (other than under paragraph (b)(2)(iii) of this section)."
As cancellation & re-enrollment is not covered by (i) to (iv) so every other situation would be considered a rescission. What do you think?
Re: Wrong Health Insurance
I'm not a lawyer; I'm an HR professional with a specialty in Benefits, and I can honestly tell you - I've been doing some form of employee benefits since 1979 and I am stumped on this one; particularly in view of the fact that a Federal judge has just ruled the ACA unconstitutional since the changes made to it by the current administration. I don't know yet how much those rules are going to hold water going forward. I really would prefer one of the lawyers to chime in on this one. pg1067, I'd be interested in your thoughts as well.
Re: Wrong Health Insurance
NOT an HR person and NOT a benefits expert (not on the HR side of things anyhow). I will say that the employer's action sound odd. Not the mistake (stuff happens), but the failure to give the employee fairly detailed plan information on just what plan they were signed up for. My understanding is that ERISA has a Summary Plan Document rule that covers this. I have never worked for a company that did not bury you with paper on the medical plan.
Re: Wrong Health Insurance
We have that information on our intranet (NOT the administrator's website - our own). Everyone has access to it. No employee ID or password is required. Anyone reading this thread here on EL could go in and find it and read about the benefits we offer. But few of our employees do.
Re: Wrong Health Insurance
Fair enough. We did that at one employer, but we also sent quarterly emails to all employees which among other things spelled out the current benefit package. The title of the email always was "If you fail to read this, anything bad that happens is YOUR FAULT."
We also included W-4 status, and anything else that we did not want them to bring to us at year end.