by Guest » Wed Aug 04, 2010 08:59 pm
Hi, first time poster, I moved to the US a little while ago so the insurance business in this country is still a bit daunting to me.
My wife and I both work, we both have our individual insurance. I have a union position so mine is through the union. We have a 6 month old daughter. My wife's birthday is before mine, which means the union will not allow me to have my daughter on my insurance as primary, she has to be on my wife's. We do not want that; my wife's insurance is much more expensive than mine. We dropped my daughter from my wife's insurance, but the union denies primary coverage and makes us put my daughter back again.
My question is if there is anyway to get around this, or is it just plain my terrible luck to be born later in the year? I find it such strange rule and completely random. Why can't I choose where I insure my own daughter?
Thanks for any help and suggestions.
JB
My wife and I both work, we both have our individual insurance. I have a union position so mine is through the union. We have a 6 month old daughter. My wife's birthday is before mine, which means the union will not allow me to have my daughter on my insurance as primary, she has to be on my wife's. We do not want that; my wife's insurance is much more expensive than mine. We dropped my daughter from my wife's insurance, but the union denies primary coverage and makes us put my daughter back again.
My question is if there is anyway to get around this, or is it just plain my terrible luck to be born later in the year? I find it such strange rule and completely random. Why can't I choose where I insure my own daughter?
Thanks for any help and suggestions.
JB
Posted: Fri Nov 19, 2010 06:00 pm Post Subject:
How is it fair/legal to offer uncontested primary insurance for one employee's child but not to another's just because of where the two employees' birthdays fall in relation to those of their wives'?
The birthday rule (as opposed to the gender rule "father's plan is primary") is established by state law. Most states now use the birthday rule as it is "politically correct" (and many mothers have better health plans than some fathers). It only governs the situation with children covered by more than one plan, since employees are primary under their employer's plan and secondary under their spouse's plan. ("The employee plan pays before the dependent plan pays"). Children are only dependents under either plan, so the "employee" rule cannot work. It is intended to prevent persons whose children are covered by more than one plan from deliberately using only the plan that provides better benefits.
Having said that, it is DOUBTFUL that there is anything in your state's law that requires a person to cover their minor children as dependents under a spouse's employer-sponsored plan if there is a cost to do so. And I don't believe that an insurance company has the freedom to require that dependents be covered under either an employee's/spouse's plan. I have never seen it happen here in California.
(It may be that group contracts in your state can legally require that a person's eligible working spouse enroll in their own employer's plan in order to be covered as a dependent under their plan -- specifically for the purpose of sticking the employer's plan with that person's claims on a primary basis. This is probably not in violation of state law.)
When it comes to covering children, I suppose your state could have a different provision in its Insurance Code, but I would certainly think it does not. (But Obamacare may eventually have more to say about this in the future.)
I would recommend filing a complaint with your state's Dept of Insurance, requesting information as to whether it is permissible to be forced to insure minor children as dependents under two different employer-sponsored plans when there is a cost to do so under either or both plans. That should solve the matter for you.
Posted: Fri Nov 19, 2010 07:00 pm Post Subject:
Thanks again for the info.
Your comments about the birthday rule definitely leads me to believe that my employer's insurance company is using the BR out of it's intended usage, possibly in order to help them deny primary coverage to dependents (purely speculation on my part:) )
One question, though...you stated:
"as to whether it is permissible to be forced to insure minor children as dependents under two different employer-sponsored plans"
I just wanted to be clear that my employer's insurance company isn't necessarily requiring that our child be covered under BOTH insurance policies, but rather that the child must be placed under the plan of the parent whose birthday occurs first in the year. If the spouse has the earlier birthday, than the child must go on their plan, but they are also permitted to be placed onto the employee's plan, but only as secondary.
I'm guessing you understood that from my previous post, but I just wanted to be sure :) Your one comment that I quoted just made me want to double check.
I'm in Indiana btw, and I definitely plan on calling the IDOI and speaking with them as it's costing us an additional $1000+ a year and I'm sure it's costing some other employees here much more.
Posted: Sat Nov 20, 2010 12:07 am Post Subject:
but rather that the child must be placed under the plan of the parent whose birthday occurs first in the year. If the spouse has the earlier birthday, then the child must go on their plan, but they are also permitted to be placed onto the employee's plan, but only as secondary.
That, as far as I know, is a blatant misapplication of the birthday rule. The birthday rule is used only to COORDINATE BENEFIT PAYMENTS when a child is covered by more than one plan. I don't know of any state's laws that would use it in the manner you have indicated. Here's what the IN Insurance Code has to say:
IC 27-13-33
(emphasis added)Chapter 33. Coordination of Benefits
IC 27-13-33-1
Coordination of benefits provision; purpose
Sec. 1. Health maintenance organizations may adopt a coordination of benefits provision to:
(1) avoid overinsurance; and
(2) provide for the orderly payment of a claim when a person is covered by two (2) or more group health insurance or health care plans.
As added by P.L.26-1994, SEC.25.
IC 27-13-33-2
Provision consistent with 760 IAC 1-38.1
Sec. 2. If a health maintenance organization adopts a coordination of benefits provision, the provision must be consistent with the coordination of benefits provisions of 760 IAC 1-38.1 as it may be amended or replaced from time to time.
As added by P.L.26-1994, SEC.25.
The rest of the "rules" are contained in the IN Administrative Code. I've excepted the 10 pages that deal with coordination of benefits, and there is absolutely nothing there to support what you are being asked to do by your employer's health plan. (Send me an email or PM with your email address and I will send it to you.)
It would appear to me that your insurance company is engaging in a form of UNFAIR BUSINESS PRACTICE (limiting its risk of loss by improperly denying enrollment), which is also prohibited by the Insurance Code. That's what you would complain to the DOI about. If found to be true, the insurance company could be in BIG trouble with the state.
Click the PM or email link below and send me your email address!!
Posted: Sat Nov 20, 2010 02:16 am Post Subject:
Max,
I briefly spoke with my insurance rep within our HR department today. I'm supposed to get back with her on Monday concerning whether or not this requirement is enforced by our employer or our insurance provider. I did this because, according to the IN DOI, if it's a requirement laid out by my employer there is apparently nothing that the DOI can do. They actually recommended that I call and speak with the Department of Labor if this is the case.
So, I called the IDOL. They forwarded me to the federal DOL since apparently this would be a federally mandated/regulated issue. In speaking with the federal DOL, not much was accomplished. The woman didn't seem to know much about insurance (she had very little knowledge of COB for starters). She did say, however, that the employer can conjure up and enforce rules such as this, but I honestly don't know how much weight I can place on her answer (just judging from our brief conversation).
Another thing was brought up recently. Someone had mentioned that under the new Obamacare regulations insurers could not deny coverage to a dependent under the age of 27 (I'm sure there are special requirements, etc.), so with that being the case, how could my employer deny coverage to my son if I chose to not place him on my spouse's plan?
Posted: Sat Nov 20, 2010 02:22 am Post Subject:
Oops, dependents under 26, not 27. I know it's not relevant to my issue, but I felt I needed to fix it anyway :)
Posted: Sat Nov 20, 2010 09:27 am Post Subject:
I'm going to respond in two ways. First, I have sent you the relevant section of the Indiana Administrative Code (760 IAC 1-38.1). In that document, in Section 11, you will find the important passage on which you need to stake your position:
(c) A COB provision may not be used that permits a plan to reduce its benefits on the basis that:
(1) another plan exists and the covered person did not enroll in that plan; or
(2) a person:
(A) is or could have been covered under another plan, except with respect to Part B of Medicare; or
(B) has elected an option under another plan providing a lower level of benefits than another option that could have been elected.
Indiana state law is clear -- you cannot be forced to apply for another benefit plan. Your employer's plan cannot exclude your dependent children on the basis that another plan may be available.
When you talked to someone at the USDOL, was it someone from the Employee Benefits Security Administration, or a clerk who answered the phone?
She did say, however, that the employer can conjure up and enforce rules such as this,
You obviously talked to the wrong person. You may need to file a formal complaint with the USDOL EBSA. But maybe not.
I have spent some time reading ERISA and a couple of federal court cases on the matter. First, ERISA has no coordination of benefits provision within its pages. As a result, this places a burden on the federal courts to create a "common law" applicable to the issue. One of the clearest, and most succinct discussions is found in PM GROUP LIFE INSURANCE CO. v. WESTERN GROWERS ASSURANCE TRUST (953 F.2nd 543).
Noting that ERISA is silent on COB provisions, the district court held that the applicable law of the state (California) regarding COB provisions is not preempted by ERISA, except in the case of "self-funded plans". It is also clear from the reading of this court's opinion and analysis, that COB applies when a person is COVERED BY MORE THAN ONE PLAN (as I have stated previously). Indiana state law says the same thing. (The case also involved a self-funded plan, and the court determined that the self-funded plan's coverage was primary according to the birthday rule). There is nothing to suggest that a COB provision/birthday rule can be the basis for forcing a person to enroll their dependent children in another plan. (The court also relied on previous decisions in similar cases in other districts.)
If your employer-sponsored plan is not a "self-funded" plan, then it is clearly regulated under state law to the extent that ERISA does not supersede. And ERISA clearly does not supersede in the matter of COB provisions. Even if it is a self-funded plan, ERISA may still not apply in your matter.
But if it does, ERISA is predominantly concerned with the fair application and access to employee benefit plans by all "similarly situated individuals", and the effect of unfair discrimination against persons within a class of employees.
It is a well-settled principle of federal and state law in all states that marital status is one of several factors that cannot be the basis of discrimination (such as race, color, religion, national origin, sexual orientation, etc).
Even if your plan was a "self-funded" plan, where ERISA controls almost all aspects, it would still likely be considered DISCRIMINATORY to disallow a married person from enrolling his/her children as dependents under the plan by forcing them to enroll in their spouse's plan (by virtue of birthday or not).
I would doubt that the plan forces divorced employees to enroll their dependent children in their former spouse's employer's plan (without that ex-spouse's cooperation, it would be nearly impossible to get the children enrolled in that other plan without a court order). And what about unmarried employees with children -- do they force that person to enroll the children in the "biological" parent's plan?
Do you know whether your employer's health plan is a "self-funded" plan or not? That's one question that remains to be answered. You also need to get a copy of the actual contract language they are relying on. Even if it is a self-funded plan, I think that the discrimination aspect I have outlined above is well within the purview of ERISA (and enforced by the EBSA), even though there is nothing about COB in the Act.
Once you have that answer in hand, then you will know how to proceed. If it is not a "self-funded plan", then you need to press the point with the Indiana DOI, invoking the words of the Commisioner's own regulations in 760 IAC 1-38.1-11.
If it is a self-funded plan, then you press the point with EBSA. Either way, the specific point you need to press is that the plan's erroneous definition and application of COB is DISCRIMINATORY because it its based on marital status alone.
In the meantime, forget the business about Obamacare (which would absolutely be true) until 1-1-2014. Your employer's plan is probably "grandfathered" under the rules that existed prior to the effective date of 9-23-2010,
Hope this helps.
Posted: Sat Nov 20, 2010 12:49 pm Post Subject:
Max,
After looking up the definition of a 'self funded plan' :) , I can tell you that our company does not have this...they pay a premium to Anthem BCBS to provide our coverage.
Concerning your question: "And what about unmarried employees with children -- do they force that person to enroll the children in the "biological" parent's plan?"
The answer is no, the child would automatically be accepted to the employee's (my employer's) plan. So, as you mentioned, this definitely sounds like marital discrimination.
I have the paperwork sitting in my desk at work that lays out these particular rules. I will definitely go get them today and quote these sections for you. Actually, I'll probably go ahead and scan the entire page then email it to you if that's okay.
Concerning my conversation with the USDOL, I believe a clerk initially answered the phone, but they forwarded me over to the (I believe) Employee Benefits Security Administration after explaining to them my situation. It was after 4pm on a Friday, so maybe they just didn't want to spend much time on the phone with me :)
Once again I want to thank you for the immense help you've been giving me (and it appears many others on this site as well). The fact that you've spent time digging through old cases to help me with my issue really does mean a lot!!
Posted: Sat Nov 20, 2010 12:57 pm Post Subject:
I forgot to mention this is the last post. Concerning Obamacare and our plan being grandfathered...I believe during our benefits meeting last week, our HR insurance rep stated that since they are making some changes to the plans for next year, their old plan can not be grandfathered. I can double check on this Monday if it would bear any additional weight on my argument.
Posted: Sat Nov 20, 2010 04:38 pm Post Subject:
they pay a premium to Anthem BCBS to provide our coverage.
It's not unusual for some self-funded plans to obtain insurance to cover some of their risk, and the BCBS contract could still be within the definition of a self-funded plan. It has to do with how the company is administering all of its benefit plans. But, you're probably correct, especially if your company is relatively "small" -- under 150 employees or so -- or has somewhat unpredictable or unstable cash flow.
There was just new guidance issued in the last week or so about "grandfathering" of plans. Originally, it was meant to prevent changing insurance companies. But now, even if a new insurance company is taking over an existing plan, as long as the benefits are essentially unchanged, the plan may still be grandfathered, if the real reason for the change from Company A to Company B was to obtain a lower premium.
Changes which would prevent the grandfathering would include deletion (or addition) of a major coverage segment (but not the elimination of the "annual" or "lifetime" benefit limits as required by the PPACA), revising the plan concerning what makes an employee eligible, terminating coverage for dependents entirely, converting from a noncontributory plan (the employer covers the employee cost 100% and 100% of eligible employees are covered) to a contributory plan (where employees pay some or all of the cost), those are the kinds of things that would preclude grandfathering.
I think you are on pretty firm ground to be able to tell your plan administrator to learn to read and understand the Indiana Insurance Code and the Administrative Code, before you file your federal class action suit against them. Keep us informed of your situation.
Posted: Sat Nov 20, 2010 08:02 pm Post Subject:
Our company employs approximately 1000+ people, so I'll ask whether or not they use a self-funded plan.
Also, they are offering an HRA plan this year which is new for them. If I remember correctly, they said that this was the reason for them losing their ability to have a grandfathered plan.
BTW, apparently my employer has a contributory plan since they pay a large portion, but not all, of the premiums. This hasn't just changed, though...it's been that way for approximately 6 years.
I'm going to go ahead and email you the rules sheet I had mentioned previously...I hope you don't mind.
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