Too much of a good thing

July 8, 2009 11:48 AM

Am I committing health insurance fraud?

I work for a woman who owns her own business and she and I are the only two employees. We have a company health insurance plan that requires the company to maintain two (insured) employees. The rates have skyrocketed so she wants to cancel the policy. I got married a few months ago and my husband added me to his insurance through his company, which we had to do within 30 days of our marriage. Unfortunately my boss is having issues getting her own insurance so the policy has to remain in place until her issues are resolved and she can cancel it. This means I'm covered by (and paying for) two policies, which I think is illegal or against insurance rules or somehow not allowed. (I asked our insurance broker about it before signing up for my husband's insurance, and all he said was that you aren't allowed to be covered by two companies.) I haven't yet used my husband's insurance but think it offers better coverage than what I have now. Can I just quit using my company's insurance and start using the new insurance? My concern is when I go to the doctor and the medical form asks if I'm covered by any other insurance. I know insurance companies are sticklers for stuff like this and I don't want to screw myself for future coverage because of this one incident.

posted by anonymous to Work & Money (15 answers total)

You can be covered by two policies of private health insurance so far as I know. (I do not know how this applies to Medicaid, Medicare and other government plans.) But you have to make sure that each policy knows about the other one ("coordination of benefits").

Having two policies doesn't really make much sense for most people because the policies are so expensive and the benefits are limited.

You can (anonymously) call your state's insurance commissioner to ask this question if you would like more reassurance.
posted by FergieBelle at 11:57 AM on July 8, 2009

I can't specifically answer about the legality, but if you file a claim, you may be asked to fill out a "coordination of benefits" form. This form will ask if you have other insurance, so the company can decide whether, and how much they will cover. I would imagine that not being truthful on that form could present some problems. Perhaps not legally, but the company could decide to drop you.
posted by The Deej at 12:02 PM on July 8, 2009

I've heard (via Dave Ramsey) that having two insurance policies is much worse than having one, because each insurance company argues that the other company is the "primary" provider and won't pay up. It gets to be a big mess to untangle and in the meantime your hospital bills don't get paid.
posted by tanminivan at 12:04 PM on July 8, 2009

I agree that it isn't illegal, but, it is redundant and a waste of money. I do believe though that your company's insurance would be the primary insurance for any medical care that you receive.
posted by Hanuman1960 at 12:11 PM on July 8, 2009

What state are you in?

Last I checked, in Georgia, a person could be under two policies, with one designated the primary, the other secondary.
posted by Brandon Blatcher at 12:16 PM on July 8, 2009

Trying to claim from two companies would definitely be breaching your contracts with each of them and probably illegal. It isn't that unusual for people who are changing insurance companies to have brief periods where they are covered by both companies, but as tanminivan pointed out, it can be administratively messy if you need to make a claim during that period.

If your boss wants you to maintain the extra coverage for her benefit, then she should be paying for it out of her own pocket, not out of yours. Right now, you're paying for something you don't need so that her premiums are lower. And if she's set on getting coverage for herself at the group rate, she'll probably want the same discount with the new insurer. Just make it clear to her that you're not willing to subsidise her insurance. There's nothing to stop her insuring as an individual - she's using you for her own financial benefit and it's costing you money.
posted by Lolie at 12:20 PM on July 8, 2009

Trying to claim from two companies would definitely be breaching your contracts with each of them and probably illegal.

Should read "trying to claim for the same item. Obviously you can have "top-up" insurance in addition to your basic coverage.
posted by Lolie at 12:22 PM on July 8, 2009

I'm agreeing with what others have written, but will add a comment with a bit of authority (because I've worked professionally to fight insurance fraud for 14 years)

It is not Fraud to carry 2 policies. It would be Fraud to submit redundant claims to both policies. Some persons may believe that, just because they are paying for a policy, they deserve the right to collect on whatever that policy might cover. That is an incorrect belief. An insurance policy is essentially a contract that causes the policy-giver to indemnify the policyholder. "Indemnify" essentially means to restore the policyholder to the condition (be it financial/material/whatever) that he or she was in prior to the incident that caused loss. If attempting to receive reimbursement from 2 or more carriers, then the policyholder is committing Fraud by attempting to profit from the incident.

/note: this does not hold true for life insurance.
posted by Dave. at 12:54 PM on July 8, 2009 [2 favorites]

Many people have 2 insurance policies. One is your primary insurance, and the other is your secondary insurance.

So, let's say you've already met the deductibles on both. Then, let's say you go to the hospital. Your primary insurance pays for that hospital stay, and your secondary insurance pays for whatever the primary did not pay. This previous AskMe discusses primary and secondary health insurance policies.
posted by Houstonian at 1:28 PM on July 8, 2009

You're not committing insurance fraud, but you are committing personal finance malpractice.

Also +1 on what Dave. wrote.
posted by JohnnyGunn at 2:08 PM on July 8, 2009

You can have and pay for as many health insurance policies as you want. It is not illegal.

Many of my patients have two policies with our company. There is not a lot of benefit, but they get the "dual coverage-no copayment plan" which can save them a bit.

My hubby and I have that dual coverage, but will change in the next open enrollment period so that we have one plan with my company and one plan with another. Probably BC/BS. This is to give my daughter more flexibility while she is away at school, since my company doesn't operate near her college.
posted by SLC Mom at 2:16 PM on July 8, 2009

Follow-up from the OP

Thanks to everyone for their replies. To clarify, my boss is trying desperately to switch to an individual policy and is having problems with the insurance company, so it's not a case of her taking advantage of me in order to reduce her premium rates. I know I could just tell her to cancel my policy or pay for my premiums in full, but she's in a tough spot right now and I want to help her out. (She's also keeping me employed full time when she could probably reduce my hours, but that's another story.) It sounds like I can carry both policies as long as I don't submit the same claim to both companies, and really all I want to do is stop using the old insurance and only use the new insurance for everything. I didn't know about the state's insurance commissioner and will definitely be calling them. I'm in VA, if anyone else has helpful information or resources for my location.

posted by jessamyn at 2:47 PM on July 8, 2009

Warning: you aren't supposed to choose which policy you use. The insurance companies have rules in place to determine coordination of benefits when you have two policies. I was in your situation when I had my own health insurance and I was also covered by husband's family policy. What happens is that you file a claim with your own insurance (which would be primary for you). Once you get the explaination of benefit which shows what they pay and what you have to pay, you can then submit a claim, along with the EOB to your husband's insurance and they will calculate how much of the remainder they will pay.

The insurance companies routinely ask if you are covered by any other insurance - especially if you are making claims on your spouse's policy. I seem to recall that the process of filing the second claim was automatic for me - I just got an EOB from my insurance and then a few weeks later an EOB from my husband's. The result is that I paid less out of pocket than if we had only the one policy, although not enough to justify the cost of the second policy if I had to pay it myself.
posted by metahawk at 3:05 PM on July 8, 2009

I worked for 20 years as a health insurance claim examiner. It's perfectly okay for you to be covered by both policies. Also, do NOT cancel your coverage with your husband's policy! If you have to add yourself back on later, you might very well be subject to a pre-existing condition clause that otherwise would not have applied.

Typically, your insurance through your employer will be the primary payer and your husband's policy will pay second. It's called "coordination of benefits" and, if your policies are both reasonably good, what it means it that you're likely to have no out-of-pocket expense on your medical bills. (That's a very good thing!)

So, not to worry. You're not doing anything wrong.
posted by rhartong at 4:23 PM on July 8, 2009 [1 favorite]

it's called "co-insurance" lots of people have it.

keep your insurance with your husband, and start using that for doctor's appointments if it's better.

and your boss should not make you pay for something you don't need anymore. that's not cool at all.
posted by misanthropicsarah at 9:46 PM on July 8, 2009