Adoption and new application

[schealthagent]

I recently ran into a couple that had just picked up a new health insurance policy. It seemed to be the proper plan for their situation save one small detail. They mis repped on the application in saying that they were not in the process of adopting a child (domestic, infant) when in fact they are. They havent found a mother yet but are working with an agency. I want to give them solid advice but have no experience in this area. What are the possible ramifications of their actions (best and worst case)? How far would an insurance company go to prove they were in the process and would they even care as long as the child is healthy? Thanks.

 

[moonlightandmargaritas]

I recently ran into a couple that had just picked up a new health insurance policy. It seemed to be the proper plan for their situation save one small detail. They mis repped on the application in saying that they were not in the process of adopting a child (domestic, infant) when in fact they are. They havent found a mother yet but are working with an agency. I want to give them solid advice but have no experience in this area. What are the possible ramifications of their actions (best and worst case)? How far would an insurance company go to prove they were in the process and would they even care as long as the child is healthy? Thanks.

Bad news for ya.

If they're working with an agency, they're "in the process" - and there's a paper trail. Believe me, if there's a major claim, they investigate.

Insurance companies are not concerned about healthy infants. If they have to take dependents automatically, they're on the hook - healthy or unhealthy. That's a wild card for them, and they don't like 'em.

 

[schealthagent]

Thanks, what kind of paper trail would they actually have (access to) to prove that they were in the process at the time of the application? Have you had any actual cases, would they rescind the whole family or just not cover that child?

 

[TXINSURANCE]

In process of adoption is generally handled the same as being pregnant.

There is a huge claims risk in adopting a child, possibly even from abroad.

Some states allow the automatic addition of a child (even adopted) to a policy per state law (like Texas), which is why carriers reject those in process of adoption.

 

[moonlightandmargaritas]

Thanks, what kind of paper trail would they actually have (access to) to prove that they were in the process at the time of the application? Have you had any actual cases, would they rescind the whole family or just not cover that child?

They have access to any records they need to do the underwriting process - I'm sure they signed a release for that if you check the app.

They would rescind the entire policy - can't just rescind dependents.

 

[schealthagent]

Thanks, I will advise that they switch to group plan until everything clears up. They are lucky in the sense that they have that option.