How to appeal termination of COBRA benefits?

April 5, 2009 10:43 PM

The company that administers my COBRA benefits terminated me because, they said, of an NSF check, which my bank had told me would clear. But it didn't because the check was put thru literally hours before a hold on a $500 check was released. Apparently the bank rep was figuring that either A) the bank would pay the check (they have before) or B) the hold release would happen before the check came thru. My cyber-statement even shows that the check was paid; then the next day it was sent back. (So when I checked my cyber-statement to confirm the info from the phone rep, the check was shown as having been pd.) Q 1) How and to whom do I appeal? Q 2) Is it worth the effort?
posted by Macbeth123 to Health & Fitness (4 answers total)

You're unlikely to get the bank to admit they made a mistake unless you have a tape recording of the original call with the bank, although if you're persistent enough they might refund the NSF fee, especially if its your first such request in the past few years. If you get a refund of the fee from your bank, that would be additional ammunition for you in dealing with the insurance company. I would focus your efforts more on the fact that they terminated your benefits because of one NSF check (or have there been other payment-related problems in the past?). Offer to pay the charges, plus a late fee, and next month's bill in advance (scrounge up the money if at all possible). Good luck.

My understanding is that you'll have a hard time getting individual insurance covering any pre-existing conditions unless you have continuous coverage (unless you're in Massachusetts). How much of a problem this is for you will vary depending on your health. Others can weigh in with experiences I'm sure.
posted by zachlipton at 11:18 PM on April 5, 2009

If you can't get back on COBRA check out the alternatives with self-insurance.

I'm paying $200/mo for a $1700 annual deductible plan through Blue Shield. I've used it a couple of times now and I am satisfied with the billing they're doing (eg. only paying $40 out of pocket to consult with a surgical specialist) -- this plan is better than the COBRA alternative I had @ $550/mo if you do the math. . .
posted by mrt at 11:39 PM on April 5, 2009

(I used to hold an insurance license) -- COBRA isn't really designed to be an ongoing insurance; it's filler between two insurances, so you have continuity of coverage and get your pre-existing conditions waived when switching insurances due to employment change. If you're concerned about a pre-existing condition (Get a bad cholesterol test in your history? Test high for blood sugar ever in your life? They might make a picky insurance company call a whole slew of things "pre-existing"), you need to get new insurance right away, and make sure it is effective the date your COBRA was cancelled and backpay any premiums required to go back to the date. Any gap in your history means an insurance company could decline claims for various reasons. Like mrt said: health insurance can be reasonably priced if you shop around and have good health; don't jump at the first thing for simplicity sake (which may be the reason you stuck with COBRA) -- talk to different agents, look up rates online, and you might find you're much better off buying your own insurance than you ever were on COBRA.

As for COBRA: talk to the administrator, and push -- the NSF check isn't the problem, the problem is that the COBRA company cancelled the policy before you could resolve it. Insurance, when there aren't claims being filed, isn't a huge expense for an insurance company, so waiting to get a payment from you a couple weeks shouldn't be a big deal...unless you've got a history of payment problems. Since you were COBRA, they might be the kind of company that considers those policies to be dead weight (only sick people go on COBRA, so there's high claims) and they want to cancel COBRA plans as quickly as possible, but if you make your case with the COBRA company, show that you will do better in the future, demonstrate that you haven't been a huge expense for them, be nice and cheery and apologetic, and they may take you back.
posted by AzraelBrown at 9:27 AM on April 6, 2009

I had an IRS check bounce because my online statement showed that a deposit had cleared when, in fact, it didn't clear for another several days. Luckily my online statement continued to show the "wrong" date for the cleared deposit, so I sent the IRS printouts of my online statement that showed something like this:

Sept. 12: $2500 deposited
Sept 16: $1200 check to IRS presented for payment and rejected even though online balance showed plenty of funds

They forgave me quickly and all is well, so you might try a similar approach with the COBRA people.
posted by PatoPata at 9:58 AM on April 6, 2009