Duplicate Insurance Coverage
WITracy
38 Posts
Can an employer legally say that an employee cannot have duplicate health insurance? A family member has asked me this question & I have never heard of such a thing.
Specifically, the policy says: "An employee who has other coverage cannot duplicate coverages. The employee must make a decision concerning which plan to choose".
She is now being told she has to make a choice as she is on the company plan as well as her husband's.
Thoughts?
Specifically, the policy says: "An employee who has other coverage cannot duplicate coverages. The employee must make a decision concerning which plan to choose".
She is now being told she has to make a choice as she is on the company plan as well as her husband's.
Thoughts?
Comments
Also, there are co-insurance provisions with respect to property and casualty insurance and they will sometimes split the claim in some pre-determined portion, but I am not sure if these types of provisions apply to Health Insurance.
My family member (aunt) works for a non-profit DAC in southern MN -- she receives medical insurance form her employer (which is 100% EMPLOYER paid). Due to medical issues, she is also enrolled in her husband's plan to make up the difference in coverage. NOW her employer is saying; no, you cannot be covered under both plans, you have to choose (and it is in their handbook).
Again, I have never heard of such a requirement, is this legal?
Although there is 'coordination of benefits' to a degree, dual coverage does not pay 100%. If her coverage does not cover something that our policy does cover, we pay subject to our deductible and percentage. And if, for example, her policy caps a procedure at 1000 and mine caps it at 1200, then my policy will pay a percentage of the amount over 1000. That's not coordination of benefits.
I don't think an employer can mandate that there be no dual coverage. The employer can, however, have a policy that dictates the employee's spouse must either use her employer's policy as primary or suffer higher premiums for choosing his as primary and not taking her's at all. Does that make sense?
Maybe the policy of the company simply says, "There will be no coordination of benefits". Technically that is what mine says. Coordination of benefits and dual coverage are not the same thing. Coordination refers to the secondary policy paying after the primary. Ours doesn't do that, as I said.
"Life is a tragedy when seen in close-up, but a comedy in long-shot."
Charlie Chaplin
I think my President once talked with our Broker about doing this... so I think it might be possible to do. However, we are self insured so may be easier than a funded plan.
E Wart
You shoudl tell your aunt to read the health plan document and learn from the written words because the person telling her that one can not be covered by two plans. They can but it must be sequental, one follows the other. It is normally not cost effective to be fully coveraged by both plans. Claims processing and the cordination of insurance claims and coverage will, I bet be on the primary/secondary basis.
PORK
It makes sense to me that her employer could refuse to let her spouse on if he has insurance through his job, but I'm struggling with the idea that an employer can deny an eligible employee a benefit simply because they choose to pay for additional coverage on their own.
Aside from that, please confirm whether the policy being denied is self insured. If it is, I still can't believe it's legal to deny coverage, but your description of the employee suspecting denial based on claims history implies that someone within the organization may have made a decision based on the claim history. I don't happen to think that is ethical, but I have no experience in self insurance so can't speak authoritatively, but an unaware decision maker basing a decision on business (cost factors) might attempt such a step. I'll bet most forumites have first-hand knowledge of like decisions where the basis for the decision was business only to find that the decision had to reversed after all the risks were assessed.
My question on the high deductible has to do with restrictions for folks covered by HDHPs. Those plans don't coordinate with non HDHP plans, so an employee picking up coverage for dependents would be required to choose if one parent had HDHP coverage and the other had nonHDHP coverage. They both could not be covered under both, nor could their dependents. We do not offer a HDHP, but another business in our rural location does. During our most recent open enrollment, we assisted in getting information for one of our employees who found himself in that situation and had to choose which coverage they wanted for children in the family.
Aside from that, please share more details if you know more. Details are tedious but do prove to be important when decisions need to be made.
Thanks,
Most insurance laws are state laws. In this case, it would be state specific as the feds do not address it.
In my state, Kansas, it is legal. In fact, I would be very surprised to hear of a state that had made it illegal. It may not be the best or proper thing to do, but that doesn't make it illegal.
If you are in doubt, you can contact your Insurance Commissioner's office. They will be able to tell you if there is any state law that forbids it.
Employers/people discriminate all the time. Only some of it is illegal. This one isn't.
However, the states you listed may well have laws that would prevent this type of company policy. I used to live in California and can well believe that anything is possible there. I guess if a Calif. or New York has such a law I shouldn't be so surprised after all.
I don't see how you can equate any of this to sex discrimination though. The policy would apply to both male and female employees.