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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

Extending Health Plan Coverage for Furloughed Employees

Due to the COVID-19 pandemic, many employers have placed a portion of their workforces into a furloughed status. Some employers want to keep furloughed employees covered under the employer?ÇÖs group health plan. For a self-funded plan, many stop-loss insurers have approved keeping furloughed employees covered under the plan in covered employment status (as opposed to offering COBRA coverage) for up to six months. In addition, many insurance companies have offered similar coverage extensions under fully-insured, group health plans. As the pandemic continues, some employers want to continue covering furloughed employees beyond the original six-month period. Before providing extended coverage for furloughed employees, it is critical that the employer first obtain written approval from the stop loss carrier for any self-funded benefits, as well as from the insurer for any fully-insured benefits, before granting such an extension, in addition to timely amending the affected plans and communicating such amendments to participants.

Have You Notified Participants of Extended Deadlines?

As noted in our prior post here, the U.S. Departments of Labor and Treasury recently issued a notice requiring all employee health and welfare benefit plans to disregard the period from March 1, 2020 until 60 days after the announced end of the COVID-19 National Emergency (or other announced date) when determining the deadline to request HIPAA special enrollment, elect COBRA coverage, make a COBRA premium payment, notify the plan of a COBRA qualifying event or determination of a disability, file a benefit claim or appeal, or request an external review of a benefit claim denial. Although the notice did not address whether plan participants needed to be notified of these extended deadlines, plan administrators should be aware that they likely have a fiduciary duty to accurately convey this information to participants. For example, a COBRA election notice that states a deadline to elect or make premium payments without mentioning… Continue Reading

Bostock v. Clayton County, Georgia ?Çô What It May Mean for Group Health Plans

The U.S. Supreme Court?ÇÖs recent decision in Bostock v. Clayton County, Georgia held that Title VII of the Civil Rights Act of 1964 protects the employment rights of individuals who are gay, lesbian, or transgender because ?Ç£sex plays a necessary and undisguisable role?Ç¥ in discrimination based on sexual orientation and gender identity. Although this case addressed whether an employer could fire an individual based on sexual orientation or gender identity, there could also be important implications for benefit plans. For example, employees could use the Bostock decision to seek coverage under group health plans for certain procedures that have traditionally been excluded from coverage, such as gender-affirmation surgery, arguing that such exclusions violate the protections under Title VII. If the plan covers implants after a mastectomy but would not cover the same procedure for an individual who is transitioning, the exclusion for transitioning individuals may also be challenged based on… Continue Reading

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