Archive for May 2013

Can employers find a way out?

If you wonder why the Affordable Care Act legislation is such a mass of confusing and contradictory language and regulations, you might want to look at a comment by Robert Kocher, a former health advisor to the White House who helped shepherd the law.  “We wouldn’t have anticipated that there would be employer demand for these types of band-aid plans in 2014.”   “Our expectation was that employers would offer high quality insurance”  (Wall Street Journal, May 20, 2013).

 

The band-aid plans that Robert Kocher is referring to are limited (skinny) benefit plans that employers have found may offer compliant coverage and avoid some Affordable Care Act penalties.  This type of skinny benefit plan covers preventive care, a limited number of doctor’s visits and perhaps generic drugs.  Things such as surgery, hospital stays or prenatal care would not be covered.

 

The fact that Robert Kocher is surprised that employers would be demanding these type of “skinny band-aid” plans should tell you a lot about how the health care reform law was developed.  Employers utilizing lower paid employees already offer minimal benefit plans.  Robert Kocher and the administration did not “expect” employers would offer higher benefit plans; they thought they could force employers into making an offer of a higher benefit plan to employees.

 

It is important to note the reference to “band-aid plans” as it should be expected that the consortium of IRS, DOL and HHS will find a way to close this type of plan as it clearly jeopardizes the financial integrity and intention of the law in general.

 

We can only hope, and lobby for, a saner approach than “Our expectation was…”  In some circles, that would be called wishful thinking, or just guessing.

 

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Can you make a profit on an insurance claim?

Can you make a profit on an insurance claim?

Recently, the Supreme Court ruled that your insurance provider can “subrogate” your claim against other insurance you may have to recover what they paid in claims for you.

What does that actually mean, you might ask?

Let’s say you are in an auto accident and you end up in the hospital with really big medical expenses.  You submit your expenses to your employer’s group medical plan and they pay the bills as submitted.  You get healed up and go back to work.

While you are in the hospital, your auto insurance company, and the other person’s auto insurance company, begin arguing about who will pay and how much it will be.  Eventually, both auto insurance companies agree and they provide you with money for the damage to your car, AND your medical expenses.

Except for your deductible and expenses your group plan may have denied, you have already been paid for the medical claims.  Can you just keep the money you get from the car insurance company?

And the answer is – maybe not!

Casualty (car and house) insurance companies routinely try to get the money back that they paid for you from the other insurance company.  You may or may not have been aware that in the paperwork you sign with your insurance company, you agreed to let subrogation occur.

With the most recent Supreme Court decision, it may now become standard practice for a group health plan to be reimbursed for benefits it had paid in a claim due to the fact that the plan’s provisions applied to any money recovered from a third party.

One anticipated outcome of this might be much bigger demands at the time of a claim by attorneys who represent accident victims.  Attorneys will now have to get enough money to pay themselves,  medical losses for a client including time off work, pain and suffering, and then reimburse the medical plan and leave any money remaining for the client.

So the next time you are involved in an auto accident, and you decide to call an attorney who wants to settle quickly you might want to remind them you are a victim and you hope to not be bankrupted by the legal process while everybody else gets paid.

 

 

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