What can, or must, I do when a health insurance company or plan refuses to pay a claim or provide a benefit or service?
If a health insurance company or plan denies a claim or refuses to provide a requested benefit or service, it is very important that the insured or member immediately review the policy, plan or evidence of coverage document relating to claim or benefit denial, appeal or grievance procedures.
Most often, there is a requirement that the insured or member appeal a denial of a benefit or service with a written appeal within a period as short as 15 to 60 days. In addition, there are typically multiple levels of appeal or grievance, which are mandatory and which involve subsequent short time limits. Appeal or grievance procedures, depending on the policy or plan, either require that final determinations of entitlement to benefits or services be made by required arbitration, or they allow the insured or member to file a lawsuit, but only after exhausting the appeal or grievance procedures set forth in the policy or plan.
While legal assistance from an attorney is not necessarily required at the initial levels of appeal, it is strongly urged as soon as possible if the amount involved is large, or the insurer is contending the treatment you need to live is "experimental" or the matter is going to any arbitration or lawsuit. Rest assured that the health insurer or plan will almost certainly be represented by an attorney, and s/he or he will be out to have your claim denied.
How long will my medical insurance allow my new baby and myself remain in the hospital following childbirth?
Because many insurance companies would not pay for hospital costs beyond the bare minimum, Congress enacted legislation that allows mothers and their newborn infants longer hospital stays. The law requires, among other items, insurance companies to pay for at least a 48-hour hospital stay for mothers and their newborns after a regular delivery. The legislation provides for a 96-hour hospital stay if the baby is born through a caesarean section. (The legislation follows on the heels of several states that have enacted similar legislation, but due to loopholes many insurers escaped enforcement of states' laws since they are regulated by federal law.)
Are there any limitations on what an insurance company can charge for insurance?
For each type of policy, insurance companies have a range of premium levels that may be charged based on various factors that are considered at the time an application is submitted. For example, the premium for an auto insurance policy will vary depending on the applicant's driving habits, such as number of miles driven and whether the auto is used for business, the age and model of the vehicle, and whether the applicant has recently been convicted of a traffic violation. The premium for a life insurance policy will vary depending on the applicant's age and health condition. Rating factors must be reasonably related to the risk being insured, and state law often limits the specific rating factors that may be considered for certain types of insurance.
The rates and rating factors for most types of insurance must be filed with the insurance regulatory agency for each state where the insurance is to be sold. In some states and for some types of insurance, the rates must get regulatory approval before they can be used.
mployee Retirement Income Security Act of 1974 (ERISA), as amended by the Multiple Employer Pension Protection Act of 1980 (MEPPA), typically collectively referred to as ERISA.
The original noble idea behind this federal law was protection of employee benefits and pension moneys from mismanagement or theft by incompetent or greedy trustees or by organized crime. Unfortunately, except for state laws that actually regulate insurance companies or health plans, ERISA also preempts (eliminates) any state law or remedy for insured or plan members that might otherwise relate to the administration of employee benefits, including health care insurance benefits, obtained through employment. In other words, as a practical matter, if a claim for health benefits or service is denied to a person who obtained health insurance coverage through employment, they are limited to the appeals and grievance procedures in the policy or plan and cannot sue in court for such things as breach of contract, breach of the implied covenant of good faith and fair dealing (bad faith), infliction of emotional distress, fraud, etc..
Typically, if the policy or plan is governed by ERISA, the only legal remedy outside of the policy or plan is to ask a court to review the claim denial decision to see if there was an abuse of discretion, which is extremely difficult to establish. Even if an abuse of discretion is established, the claimant is only entitled to receive the benefit or service that was originally denied, and that is often too late to help. In contrast, if the plan is an insured plan, and NOT subject to ERISA, the Insurer's Bad Faith can give rise to punitive damages.
Nearly 70% of the health care insurance currently in place in the United States is subject to ERISA. The balance of the health insurance in America is not subject to ERISA. The primary exceptions from ERISA are any health insurance policies or plans issued to individuals, and any group health insurance or plan coverage for employees of any state or local governmental agency or district, and any employee of a church or church affiliated organization. In addition, ERISA may not apply even if the health insurance coverage is obtained through private employment if the following four factors all apply: (1) the employer or employee organization did not contribute in any way to or any portion of premiums, (2) the participation in the employee benefit plan or program was voluntary, (3) the employer or employee organization did not endorse or administer the insurance and, (4) the employer or employee organization did not receive any commission or participation fee in connection with the insurance program or plan.
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