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  1. #1
    Join Date
    Dec 2018
    Posts
    3

    Default 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?

  2. #2
    Join Date
    Mar 2013
    Posts
    18,340

    Default Re: Wrong Health Insurance

    Quote Quoting N0name
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    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.

    Quote Quoting N0name
    View Post

    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?

  3. #3
    Join Date
    Jun 2006
    Location
    Massachusetts
    Posts
    24,521

    Default 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.

  4. #4
    Join Date
    Dec 2018
    Posts
    3

    Default Re: Wrong Health Insurance

    Quote Quoting adjusterjack
    View Post
    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.


    Quote Quoting adjusterjack
    View Post
    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.

    Quote Quoting cbg
    View Post
    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.

  5. #5
    Join Date
    Jun 2006
    Location
    Massachusetts
    Posts
    24,521

    Default 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.?

  6. #6
    Join Date
    Dec 2018
    Posts
    3

    Default Re: Wrong Health Insurance

    Quote Quoting cbg
    View Post
    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?

  7. #7
    Join Date
    Feb 2008
    Posts
    1,179

    Default Re: Wrong Health Insurance

    So Plan C was not available in 2018 -- therefore they went with the closest one to what you actually paid ($80 vs $70).

    What I would request is that they review all CLAIMS for 2017 and 2018 such that you are refunded any money that you were out that you were not supposed to be.

    There would be a small $10 per period refund on employee contributions/premiums if they do that above and correct back all the usage of the health insurance. Since it is self-insured, they probably have a much better chance of doing so. But if they were to move you to Plan D in 2018, I'd expect them to want the difference in premiums back to 1/1/18.

    I do see where you hold some responsibility --- You HAVE been paying for Plan B all year And while you may not have had notices of specific coverage (did your medical card not have the plan level/name?), did you NOT notice that your health insurance deduction didn't go from $80 to $150 at the beginning of 2018? That alone should have caused the question about a year ago...instead of "recently".

    problem is your employer might be REQUIRED to cancel and enroll in what your elections actually were for 2017 and 2018.....I'd figure out exactly what it is you want. If you push too hard, they could make you pay back Plan D premiums in 2018 as long as your claims were adjudicated/reviewed under Plan D too.

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