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I worked at a job who had a ppo insurance plan. October 30th I started a new job with a high deductable health savings plan. The plan has a 1,050 deductible, after that everything is paid for. My company gives a contribution of $800 a year, but since I started in October I only have $136 in my health savings account.
Well then I got sick and had to see a dr. I just paid for it because I didn't see the need to deal with it. Then I had a severe allergic reaction to the medication and had to return two more times, with IV's and other expensive what nots. Then I got home and discovered I was still covered by my old employer's insurance until November 30th. I called the clinic and had them file the claims with that insurance seeing as how it benefited me better that way (at this point I had also given them my current employers card seeing as how the deductable was getting there). They refunded my money, but I've heard this was the wrong thing to do. What am I supposed to do??

2006-11-21 02:18:44 · 6 answers · asked by Lisa 3 in Business & Finance Insurance

6 answers

A) One reason why this may have been "the wrong thing to do" is if the termination date of your insurance under employer #1 really isn't November 30th.

Typically, when a person leaves an employer, their coverage under the group policy terminates pursuant to the "Individual Terminations" provision. The termination may be the date the employer notifies the insurer that you're no longer working there; the date your employment terminates; the first day of the month following your termination; or some other date specified in the contract. Unfortunately, some employers tell their employees that they have a "30-day grace period" after they leave. In each and every contract I've ever seen, this isn't the case.

Why could this be a problem for you? Because IF insurer # 1 finds out your coverage should have terminated earlier, AND there's no insurance law that prohibits it in your state, it could "retroactively terminate" your coverage, take back the money it paid, and you'll be stuck with the bill. Some states, such as mine, restrict an insurer's ability to do this. The problem is, if insurer #1 retroactively denies your claims, you may be beyond insurer #2's timely filing period, which means the claims would be denied.

You may want to absolutely confirm the termination date under insurer #1 so you can rest easily.

B) Another reason this may have been incorrect has to do with "Coordination of Benefits" between insurer 1 and insurer 2. The National Association of Insurance Commissioner's "Model Regulation" regarding COB in your case reads:

Section 5: Rules for Coordination of Benefits:
Subsection D
Number (3): "Active or Inactive Employee:" The plan that covers a person as an active employee who is neither laid off nor retired is primary. If the other plan does have this rule; and if, as a result, the plans do not agree on the order of benefits, this rule is ignored."

That's "insurance-ese" for insurer #1 should have paid as your secondary, since you're no longer covered as an active employee under employer # 1's group policy. If this is the case and insurer # 1 finds out, it can retroactively deny the claims and take the money back.

Let me know if I can help further.

2006-11-21 04:05:03 · answer #1 · answered by Suzanne: YPA 7 · 1 0

Who is telling you this is the wrong thing to do? If you were covered by the old health insurance for November, you were entitled to have a refund of the ENTIRE amount you paid.

There is no conflict, having a "health savings account" from one employer pay for the deductible/prescriptions/whatever even if the other insurance company picked up the rest of the tab.

Either I'm not understanding this right, or there is no conflict. You are NOT collecting under two different policies - the HSA is actually YOUR money, not insurance money paying out.

2006-11-21 10:49:15 · answer #2 · answered by Anonymous 7 · 1 0

Whomever told you it was the wrong thing to do was mistaken. You did nothing wrong - legally or morally. Your old insurance was, and is, still in effect. All you did was to take advantage of it, saving your HSA funds. However, if you attempt to use the charges against your current Plan's deductible, you could be running into trouble - insurance fraud.

2006-11-21 10:51:08 · answer #3 · answered by PALADIN 4 · 1 0

You file claims to whichever plan is valid at the time of service. Therefore, you did the right thing. If two plans are valid at the same time, it's up to the plans to figure out which one is primary. (It'd be different if you were married and you had one plan and your spouse has another - then it's what they call Birthday Rule - whomever's birthday falls first in the year, regardless of who is older, holds the primary plan.)

2006-11-21 12:53:42 · answer #4 · answered by zippythejessi 7 · 0 0

It was the correct thing to do. You should file claims under the old insurance until it cancels.

2006-11-21 10:43:46 · answer #5 · answered by Anonymous · 1 0

You did the right thing!
Don't worry. The old plan was the way to go!

2006-11-21 18:27:01 · answer #6 · answered by crusin65olds 2 · 0 0

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