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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Legal
Satisfied Customers: 110542
Experience:  JA Mentor -Attorney Labor/employment, corporate, sports law, admiralty/maritime and civil rights law
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Can a company sponsored health plan provider cancel coverage

Customer Question

Can a company sponsored health plan provider cancel coverage for an honest mistake that was made during the enrollment? I am 67 years old and have been covered under my wife's group health plans. I have medicare Part A only. We enrolled in a new plan last June and I was covered under the plan until January 1st. I was not notified that coverage had been dropped until April 1st. According to the carrier, individuals who are medicare eligible cannot be covered under the plan. We were not told this at the time of enrollment, an error on the part of the carrier and HR representative. I was under the impression that contained in the Affordable Care Act was a provision that carriers cannot cancel or deny coverage if an honest mistake was made at the time of enrollment. My age was properly disclosed when I enrolled. Is there such a provision under the new law?
Submitted: 3 years ago.
Category: Legal
Expert:  Law Educator, Esq. replied 3 years ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking.

I am afraid that if the terms of the plan provide those who are medicare eligible, the affordable care act did not change this right to contract as you are still allowed coverage but it has to be under medicare, then under the rights to contract they can make that restriction on eligibility for coverage.

If they have taken money to provide you coverage based on their error, while they can cancel your FUTURE coverage upon discovery of the error, they would have to either pay any bills submitted up to that point and they cannot retroactively cancel your policy under the Affordable Care Act for what is seemingly an administrative error on the part of the company for not catching that you were medicare eligible and had to apply for medicare.


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Customer: replied 3 years ago.

Thanks for your response. The carrier did collect premiums, still are, and have now retroactively denying coverage on claims that they previously paid. Still trying to work through the maze. Your response helps.

Expert:  Law Educator, Esq. replied 3 years ago.
Thank you for your response.

Most insurance carriers and even lawyers and the legislators who wrote the Affordable Care Act do not know all of the provisions it contains. You need to file a written appeal with them stating that they cannot retroactively terminate your benefits, they can only prospectively terminate benefits (meaning they do not have to provide future benefits as they have discovered the error and that you do not qualify). If they refuse, then you can contact the Department of Labor Benefits Office and also the state Commissioner of Insurance. IF they cannot resolve the matter, then you have to sue the insurance company for taking premiums and trying to retroactively cancel contrary to the federal law.

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