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Inaccurate Leave of Absence Provisions May Lead to Stop Loss Carrier Denial of Claims

For employees on a leave of absence (?Ç£LOA?Ç¥) or a furlough, employers often extend group health plan coverage during the LOA or furlough for a prescribed time period. With regard to group health plans that are considered to be ?Ç£self-insured,?Ç¥ generally, the employer?ÇÖs reinsurer, or stop loss carrier, is only required to cover claims (above the policy?ÇÖs self-insured retention level) incurred for a covered person based on the written terms of the plan. In other words, the policy underwrites the coverage that is provided under the plan document. If extended coverage during a LOA or furlough is not expressly set out in the plan document, a stop loss carrier could seek to deny claims incurred during that period. It is thus recommended that employers with self-insured plans review their health plan documents to ensure consistency with administrative practices regarding coverage during LOAs and furloughs and coordinate as necessary with the… Continue Reading

December 2020
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