Missed Health Insurance Enrollment

KenB · July 2003

We have an employee who due to our fault was not offered the option of enrolling in our self-insured health plan after the 90 day waiting period expired. We wish to make an exception to the enrollment period so he doesn't have to wait until the open enrollment period next year. We've been advised by our TPA that if we enroll him now, there is a risk that our stop loss carrier will not cover any claims that may occur between now and the open enrollment period since we are going outside the terms of our plan.

Can anyone comment on this? Is this a real risk? Can we choose not to enroll him and make him wait even though it was our fault? Seems to me that if we didn't enroll him in our plan, we would have to get an individual policy for him until next January to cover the gap or he could have a claim against us if he has a medical problem.

I'd appreciate your feedback

Ken

LindaS · July 2003

How far past the 90 days is he? Can you make his enrollment retro back to that date and simply make the adjustments in the premium payments?

KenB · July 2003

We actually are going to make his enrollment retro back to that date. However, even if we do that, I'm still wondering if the stop loss carrier could disclaim coverage if it ever came up. Our TPA is asking us to sign a letter agreeing that by making his enrollment retro, we are making an exception under our Plan and that since this exception may be outside the terms of our reinsurance agreement, we agree to be responsible for any payment that might normally be provided under the reinsurance.

So even if we make it retro, the concern exists that it won't eliminate the risk of reinsurance being denied if this person's benefit ever went above our first layer of coverage.

Hunter1 · July 2003

Do you have a late entrant provision? If the ee could qualify as a late entrant with no loss of coverage (actual claims) you might be able to get around the stop loss carrier's problem.

Pearce · July 2003

Administrative errors are made virtually every day in one plan or another. Most contracts include wording regarding administrative errors. As a supervisor of a self-insured plan (1,300 employee participants) I would simply send a notice in writing to my reinsurance company stating the administrative oversight as clearly and succinctly as possible and stating the plan sponsor's position (my company's position) that this should not be construed as an exception to the Plan but as a correction to an administrative error. I would not agree that you are making an exception to your Plan document, nor would I sign something to that effect.

KenB · July 2003

Thanks Pearce. I did as you suggested and they accepted it. No need to sign anything.

Ken

Rockie · July 2003

Since this error was the company's fault, I believe they would be liable in any event for any medical bills this individual incurred whether under the plan or not. Good advice to simply advise the company that this was an administrative oversight and you want to retro coverage back to the employee's eligibility date. It may or may not work - the only other option would be for you to continue the employee's COBRA from his former employment (I believe you could do this) or pay a private policy. Most companies will let you retro back if it hasn't been too much of an oversight.

NaeNae55 · July 2003

I used to work for a TPA company and we had this situation come up more than once. We just wrote a letter on behalf of our client to the reinsurance carrier. Then we recieved a letter telling us the employee would be covered. Of course, the reinsurer was not exactly required to do this, but we never saw a case where they didn't.

Good luck!

Missed Health Insurance Enrollment

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