Panic level: surprise cancelled health plan
July 8, 2019 4:27 PM   Subscribe

I’m on maternity leave in New York (official, getting family leave money) and I just found out my workplace insurance coverage for me and my newborn has been canceled as of June 1st. Work says they are looking into it and will have it fixed ASAP- but oh my god. Does anyone know what this even means?

Obviously I’m starting the new job search right away- but right now I don’t trust them to give me the correct information- either they are really bad at this stuff OR they are circling the drain and won’t be honest anyway. Here are my questions for anyone that might know:

1. If my insurance was cancelled without notice (like this) and reinstated, will the visits in June and July be covered retroactively?
2. Does this affect my deductible?
3. If the company goes under tomorrow, do I sue them for the unpaid medical bills? How likely would it be to recover any of that if they have other, bigger creditors?
4. Is this something to talk to the labor board about?

More subjective questions-
I assume that the only reason for my coverage being cancelled is non-payment. Does that mean that everyone’s coverage is suspended? Is it possible that somehow just me and my dependent could have been dropped? If so, how could that be anything but intentional?

Has anyone had this happen before? Has this ever resolved in any way other than the business filing bankruptcy?

posted by anonymous to Work & Money (11 answers total) 3 users marked this as a favorite
Take a step back and take a deep breath. You have not been notified that any of your bills will be denied by the insurance company. You have not been told that your company is going under. You have not found out that someone at your work has maliciously ended your coverage (for the heck of it?).

This is an error. In and of itself, it's meaningless. You need more data. Get that data, then determine whether you still have the same questions.

I would suggest starting with your work's HR and asking when they will have new information. Mistakes like these do happen - much more frequently than you'd expect. It's absolutely not necessarily the case that they are either "really bad at this stuff" or lying to you.
posted by saeculorum at 4:36 PM on July 8, 2019 [12 favorites]

(as a data point, a previous company of mine - with quite competent HR - had its health insurance coverage dropped for every employee. The company changed its checking account provider and notified the health insurance company accordingly. However, the health insurance company never applied the change, nor notified my company that they weren't paying their bills. Although arguably my company should have noticed a significant amount of money was not being pulled from their accounts, that was overlooked. I don't attribute malice or incompetence to the people involved in this. Insurance was restored - retroactively - immediately upon resolving the error.)
posted by saeculorum at 4:41 PM on July 8, 2019

Following up on what saeculorum said, my first guess would be that some status got screwed up and your name fell off a list because you are on leave. I've seen that before, although not necessarily with insurance.

Unless you have other reasons to doubt the solvency and competence of the company I think you may be jumping the gun.

When it is reinstated the coverage should either be backdated if the insurance company is at fault, or your company will be on the hook if they're the ones who made the mistake.

I can understand being very worried in this situation, but just going on the information you've given it sounds like a typical snafu.
posted by Tell Me No Lies at 4:47 PM on July 8, 2019 [3 favorites]

A data point for "Weird stuff happens sometimes": my baby's insurance was active for exactly one month, then she was suddenly off the plan, which we found out when the doctor's office called us saying they were having billing issues.

Called HR, HR went "huh, that's strange". HR fixed it/bothered Cigna about it, it got sorted out somehow. It wasn't clear what had happened, but the coverage was retroactive, and her visit was covered in the end.
posted by damayanti at 4:48 PM on July 8, 2019

This happened to me and many others at the beginning of many...most? semesters when I worked for a university. It was always just an error (or an "error"? I imagine a lot of prescriptions were paid for out of pocket during that first week and even though the coverage was retroactive, you would have to file a claim.)
posted by Ralston McTodd at 4:48 PM on July 8, 2019

The most likely scenario is that it was a company payment issue: your company may have forgotten to pay the bill, auto-pay may have been accidentally turned off, maybe there was a bank account switch and the carrier wasn't updated... this stuff happens all the time. (Source: I work in this industry.)

With company nonpayment, yes, all employees' insurance gets cancelled. When the company gets it fixed, your coverage will be reinstated retroactively--this means no gap in coverage, no impact to deductible or out-of-pocket max, and you'll be able to submit a claim for any covered services you received during the time it was cancelled.

In the unlikely-but-still-possible event it was just your coverage that was cancelled, it was likely a slip-of-the-finger-type error--maybe your name was next to the name of someone who's quitting on the list, and the admin or the carrier clicked Terminate next to your name instead of theirs. Again, this happens all the time--there's more manual, error-prone work going on behind the scenes here than most people want to acknowledge. If that's what happened, the same resolution will apply: it'll be reinstated, no gap in coverage, no impact to deductible or OOP max, and you'll be able to submit claims for covered services received.

Since it sounds like you want to be prepared for the worst-case scenarios, I'll share those below. Please keep in mind these are EXTREMELY UNLIKELY scenarios and it is almost certainly one of the situations I've already outlined above rather than one of these.

Worst-case scenario 1: The company goes under tomorrow, or otherwise isn't willing or able to reinstate the company's health insurance policy. An important thing to know is that in this case, COBRA/continuation coverage will not be available to you--if there's no more company policy, there's nothing to continue on. You will, however, be eligible for Marketplace coverage, or (if this is an option for you) coverage through a family member as a dependent. You'll technically be outside of the usual 30-day enrollment windows if coverage ended June 1, but exceptions are generally granted in cases like this--you may just need to write a letter stating the situation.

Worst-case scenario 2: The company didn't pay, and is too far behind for reinstatement (for most carriers this is several months--not just 1 or 2 missed payments), but still wants to make sure employees have health insurance. In this case, they'll have to set up new health insurance plans all over again. It's possible they may not be able to do it with the same carrier, meaning you'll have a new insurance carrier and your deductible and OOP max will reset. It's possible they won't be able to start the new coverage retroactively to June 1, and you'll have a gap between June and whenever the new coverage starts--and again, deductible and OOP max will reset. In this case, I'd recommend talking calmly but firmly to HR about how they intend to cover the gap, and potentially securing legal counsel if they don't seem forthcoming with their plan to make it right.

But again, it's probably an oopsie rather than malice or extreme incompetence, and your coverage will be reinstated with no more annoyance than having to submit claims.
posted by rhiannonstone at 6:14 PM on July 8, 2019 [4 favorites]

If it really was an oopsie, they should be able to reinstate with no break in coverage. My employer accidentally terminated me once (processed an employee’s resignation letter to me as my resignation?) - I got the letter saying my coverage had been cancelled, but they managed to straighten it out. Even if you had claims denied, you could have them reprocessed once your coverage is back up.
posted by ThePinkSuperhero at 7:38 PM on July 8, 2019

Agreed that sadly, this kind of thing happens but is easily corrected. One of my employees had her health insurance through our company strangely and randomly dropped, for absolutely no damn discernible reason. Once she brought it up, the issue was corrected retroactively.

It’s possible this is a sign of malfeasance from your company, but more likely a bureaucratic blip that was not caused by anything other than standard human error, and will not result in you actually losing insurance coverage.
posted by samthemander at 7:56 PM on July 8, 2019

As someone who's written software in this area before, I can tell you that it's ridiculous how often people are dropped from coverage incorrectly. As long as your HR person stays on top of them, it will be retroactively reinstated in the vast majority of cases.

If they can't fix this, then you have grounds to go after your employer (or, possibly the insurance company directly) in court to get things paid. If it goes that far, do check in with a lawyer who will know what your state's rules are for this.
posted by Citrus at 8:34 PM on July 8, 2019

This exact thing happened to me on maternity leave. It turned out that when our HR person notified the benefits company that I was on disability, some wires got crossed and they canceled my insurance. It got fixed in less than a week.
posted by entropyiswinning at 9:57 PM on July 8, 2019

This also happened to me, also with an NYC-based employer. This was a large employer, and it did not (to my knowledge) happen to anyone else. It was not a payment issue -- they were, and still are, totally solvent. It did not happen during a provider changeover or during open enrolment. HR never did give me a satisfactory answer as to what, exactly, happened, but it really did seem to be an issue where someone somehow accidentally clicked the wrong button and unenrolled me by mistake.

I contacted HR and squawked at them in a panicked fashion and everything got totally fixed just fine. I had a temporary issue where I was unable to fill a prescription, but the office visit where the scrip was written, which fell during the "cancelled" window, was reimbursed as normal. (I probably would have been reimbursed, had I paid out-of-pocket for the scrip, but I was too freaked out to try, and just held off until after sorting things with HR.)
posted by halation at 10:03 PM on July 8, 2019

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