Does Employer or Blue Cross Control Last Day of Coverage

[LJEsposito]

So my wife left her job (mid-May). She has information from her employer that says her Health Benefits will end the last day of the month. She went to purchase a $70 prescription today, the last day of the month, and her insurance had been canceled. We called Blue Cross (Anthem) Customer Service. Madeline said the actual cancellation is controlled by the Employer. I suggested for a service that costs tens of thousands a year with payout of hundreds of thousands and more, I'd think there is something more official than "when the employer sends the cancellation". Am I mistaken? Is there nothing in writing that I can refer to that would dictate the exact second that our service would end (after notice of termination from the employer)?

Thanks,
Larry

 

[kgmom219]

There's a lot of "if, ands or buts", but the general rule is that when the Employer applies with a carrier and completes the employer application, they are given 2 choices:

Option 1: Allow for mid-month start dates, which also allows for mid-month termination

Option 2: All employees start on the first of the month after X waiting period and all employees term on the last day of the month of employment.

It also becomes state specific for small group laws, large group laws, and self-funded laws, which are federal.

For clarification, you need to look at the Summary Plan Description. (Its the 1/2 inch book you got at some point.) The eligibility rules will be listed there. If you don't have the book, request it via email (its important that the request is in writing).

Or just call HR and ask why the letter is different from what Anthem is telling you. The problem is that its now June and its going to be difficult to get it paid either way.

(My guess is that HR messed up on the letter. Termination dates are hard coded in the Anthem system. The eligibility people don't really have control over them. If the system says "mid-month", then the date of work termination is also the date of the insurance termination. If it says "last day of the month" then the date is populated by the system when the date of termination is entered.)

Sorry! I know this isn't the answer you were looking for!

 

[LJEsposito]

Thanks so much for your prompt and detailed reply.

So, assuming that the employer has signed up with Option 2 since they stated in their original overview letter and recent termination information that Healthcare benefits would terminate at the end of the month, it would seem, excluding the acknowledged multitude of ifs, that the employer terminated my wife mid month as expected which automatically set the end-of-month termination of services as perhaps documented in the Summary Plan Description (SPD). So, the employer was simply responsible for identifying the month and Blue Cross is responsible for setting the date based on the End of Month Option chosen by the Employer.

Therefore, the answer to my question, ignoring those ifs, is that Blue Cross (Anthem) is responsible for the actual day and minute the termination took place. I'm hoping the SPD you reference will clarify why we weren't able to receive benefits up until midnight on May 31, 2016 and instead were denied services during the early evening of May 31, 2016 suggesting termination earlier that day as "assumed" by Madeline (Anthem's Customer Service) who didn't seem familiar with the 2 Options you suggested and almost suggested an Option 1 whereby the termination takes place whenever the employer requests it. She said there was lots of information she didn't have access to working in Anthem Customer Service and that the Employer would be the best source for us to follow up on our perceived breakdown.

I told Madeline that I believed there should be something in writing in our Terms of Service (between the insured and the insurer that did not require employer intervention for reconciliation). Fortunately she did send me such a document, like you mentioned, and I'll research further.

I just find it so odd that benefits ending on the last day of the month could be interpreted to mean when the day begins rather that after the day (and month) ends! It would almost appear that the Employer, perhaps unintentionally, overrode the automatic month end termination with a manual termination that shut down our benefits a few hours to a full day prematurely.

I'm not saying there was a motivation of greed or malice but it is important to note that without something in writing that could hold up in the courts, an insurance company could increase profits quite a bit with these pre-mature terminations especially since few will endure an hour and ten minute wait and then agree to be placed on hold again only to be advised to check with the employer. I'm the type that will endure the long hold nonsense, but my wife was unwilling to endure the spectacle that she saw me struggling with feeling the $70 lost wasn't worth the effort of fighting through the ridiculous red tape. It just irritates me that potential incompetence (or greed) of the insurance company leads to bigger profits unless someone has the perseverance to ascertain any funny business, which understandably could turn out to be legit instead.

Thanks again for your valuable insights that you provided!