Believe it or not, I’m actually a pretty reasonable guy. Sure, I like to spend quality time yelling at insurance companies, and I don’t mind tilting at the occasional windmill of carrier “customer service” now and then.
But this is ridiculous:
Oriental Hut is a local restaurant that has been a client for many, many years. And they’ve had the same group carrier, VID, for almost three (which is quite remarkable in this market). Last Spring, one of their employees added her husband to the plan. Within two weeks, she learned that his premium would be almost $1000, and she called me to take him off because they couldn't afford that (yes, she should probably have called first to see what his rate would be, but she didn't; water under the bridge). In any case, I asked her to fax me the request, and we would have him taken off.
I faxed the request to the carrier, and presumed that all was taken care of; I never heard back from Oriental Hut that there was a problem until early September. Apparently, VID never took the husband off the policy, and had been charging the group for him all along. The employer told me this in early September, and I contacted our service rep to have it fixed. It should be noted that the employer handled it as he saw fit, which is to say, in a logical manner. Logic and insurance rarely coexist peacefully.
The employer simply deducted the amount that the (uninsured) husband was being charged, assuming that eventually VID would figure it out.
He was only partially correct.
In early September, the employer told me that the husband still hadn’t been taken off the group. I contacted our service rep, and within a week or so had confirmation that everything was now fine: he was cancelled as if he’d never been on it in the first place.
Early this month (October), the employer received a letter from VID confirming that they (VID) had, in fact, made a mistake; it basically reiterated what I had been told by email.
Case closed, right?
Don’t be silly: this is insurance we’re talking about.
Two days ago, the client received a cancellation letter from VID, informing him that the group was terminated for non-payment. Ooops.
Now, I had understood -- incorrectly, as it turns out -- that VID was charging for the husband’s May/June premium (one month), and that it was this $1000 that was in dispute. This was not correct: they were charging all the way through for him, a total of about $6,000. Their position is that, even though the husband was ultimately cancelled back to the original effective date, Oriental Hut should have been deducting the premium from his wife’s paycheck and forwarding said sum to them. They won’t reinstate the plan unless and until they receive that $6,000, which, of course, the employer has never collected. They will then reimburse that amount as a credit on the November invoice.
So, their position is: "we made a mistake, you're cancelled anyway, pay us $6,000 now to reinstate coverage, and we'll give it back to you in a few weeks."
Riiiiight.
As one can imagine, I’ve spent a great deal of the past 24 hours trying – in vain – to get VID to at least negotiate a more reasonable amount. They remain intransigent. I enlisted the help of my service rep, and eventually got as far up the corporate “food chain” as I could, all to no avail.
So, I played the only card I had left, which is the power of the gummint: I called the Department of Insurance, and was able to talk my way into skipping the on-line electronic form and directly to a specialist. The employer had to call her to grant me permission to act on his behalf, and I have submitted all the relevant details to her.
We now play wait and see…
Updates as warranted.
UPDATE 1 (Thursday 10/20): The plot thickens. The Claims Specialist at the DOI has received my email, and has started working on the case. OTOH, not a peep from the VID "supervisor," despite 3 voice mails. What to do?
As I pondered this dilemna, a fax comes in from the owner of Oriental Hut: another letter from VID, dated the 13th, indicating a balance due of only $1,700. As we recall from early math classes, $1,700 is less than $6,000, so this is a good thing.
Trouble is, I no longer trust the carrier, and neither does my client. So, I call VID to see what they say today. Ooops, still showing the $6,000.
So, a follow-up letter to the DOI Claims Specialist, including the new $1,700 balance letter, and the conclusion that we have now entered the realm of "bad faith." Back to wait and see...
UPDATE 2 (FRIDAY 10/21 AM): Promising developments. Late yesterday afternoon, the business owner indicated that he would be willing, for the sake of his employees, to capitulate on the $6,000. However, neither of us trusts the insurance company to reimburse those funds as promised. Hence, a quandary. The owner suggested that a letter from VID (confirming that once the funds were received the plan would be reinstated, and that the relevant funds would then be reimbursed/ credited on the November bill) would be acceptable.
I called my service rep with this proposal, and this morning received a fax that was about 75% of what we requested; that is, they would reinstate, and would reimburse, but indicated that this could be on either the November or December bill. My feeling is that if they can put it off til December, they will put it off to December, but it’s not my call. I got the owner’s voice mail, and left a message bringing him up to date. Then, back to my service rep requesting that VID tighten up the letter to specifically say November.
And that seemed to work: they agreed to the November reimbursement, but suggested that we hold a conference call between the 4 parties (the owner, my sales rep, the carrier’s billing rep and me) to make sure that we are all on the same page. The Good Lord willin’ and the creek don’t rise, this should take place early this afternoon, and the matter resolved by late this afternoon.
Well, sorta:
Two issues remain hovering in the background. First, the owner is of the opinion (and perhaps rightly so) that he and his employees should be reimbursed for the 4-5 days that they were without coverage while all of this was going on. I’m inclined to agree with him, but this seems to me a secondary issue that should be addressed after we have the group reinstated.
The other issue is that, even though we continue to negotiate an amicable resolution with VID, the Department of Insurance is “hot on the case,” and has opened its own investigation. Even assuming that the parties reach a satisfactory resolution, I’m not sure that we can “call off the dogs;” and to be perfectly frank, I’m not so sure that we should. After all, even if (when!) we resolve the reinstatement issue, the fact remains that this whole situation should have never reached this point in the first place. And the fact that we now have so many different written claims regarding how much is owed indicates a real problem at VID. There is justice to be served here, as well.
UPDATE 3 (FRIDAY 10/21 PM): No closure, yet. After a 1½ hour conference call (see above), it was finally determined that we could all agree at how unfair and unreasonable the situation was, but reinstatement would still take $6,000 and no letter would be forthcoming.
After the call, I spoke privately with the owner, who is seriously considering just letting the cancellation go through, and finding other coverage. I did remind him that this would be easier said than done [the subject, perhaps, of another post], and he indicated that he would consult with his employees about whether or not he should accept VID’s terms.
To sum up, the owner is willing to part with the $6,000, in return for a letter which would simple say “We accept your $6,000 and your group is reinstated. On the November bill we will refund to you the credits to which you are entitled.” Notice, the only reference to actual dollars is the premium. This seems an innocuous enough statement, and indeed is simply a reduction to writing of that to which VID verbally agreed.
Of course, I was disappointed: I had really expected and hoped for closure before the weekend. I mentioned my disappointment to a colleague, who opined “Henry, you’re trying to get this done from the bottom up. Why don’t you start at the top, instead?”
Excellent advice!
So, I googled for the company headquarters and explained my purpose, eventually landing at the desk of a very professional-sounding young woman. She was understandably reluctant to write such a letter until she had investigated the circumstances, and asked me to fax her what we had so far. She is also familiar with the claims investigator from the DOI, which may or may not be important.
And so it goes.
UPDATE 4 (THURSDAY 10/27 PM): Know when to fold 'em. Neither the "executive level" woman at VID nor the Claims Specialist at the DOI have returned repeated calls over the past few days, and the meter's running out. Ostensibly, the owner has until midnight on the 31st to make the payment, but realistically he must do so in the next 24 hours.
And since he just asked me for the hot-line number to make payments by phone, it appears that that is the course he has chosen.
UPDATE 5 (FRIDAY 10/28 PM): Paid the Piper. Well, the owner called in the payment, thereby obtaining some measure of closure. On the whole, I agree that it was the right thing -- or perhaps just the least wrong thing -- for him to do.
Now, we await the resolution of several loose ends:
First, will he receive the credits due him on the November premium notice?
Second, will we hear from the VID contact person?
Third, what (if anything) will the Department of Insurance do now?
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