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Am I required to provide proof of other medical coverage?


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8 replies to this topic

#1 CA Question

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Posted 09 February 2010 - 06:46 PM

My CA employer has an "opt out" policy where they offer compensation if an employee declines or "opts out" of medical coverage. There are several plans available, and one is at no cost to the employee.

In order to opt out, you must provide proof of medical coverage from another source, such as a spouse's policy.
Is it legal to require an employee to have medical coverage? Granted, if coverage is offered (especially if there is a plan at no cost)
one would think that no one would turn down coverage if no other coverage was available. I have coverage through my spouse's plan. I decided to opt out, and I'm asked to provide proof of other coverage in order to opt out. Does my employer have the legal
right to require me to have coverage from another source? What if I just don't want insurance coverage? Do they have the option
to ask for proof of other coverage since they are compensating me for this opt out option? I understand the premise, but
unless there is a law that requires insurance coverage from some source (and this is Calif., not MA) are they not within legal bounds to ask for proof of other coverage?

thanks for any replies.

#2 leevena

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Posted 11 February 2010 - 01:32 PM

I am not a lawyer, so I cannot address the legal aspect of your question. However, as a benefits person for over 25 years, I have seen this happen a few times.

Not knowing all the facts/details of this situation, my educated guess is that the group you belong to is being required to meet a certain level of participation. The carrier will have a certain minimum participation level (for example 75%) that your employer needs to meet so that coverage can be issued. So let's assume your group is 10 lives, with 7 enrolling and 3 not taking coverage. Your participation level is 70%. However, if one of the three not taking coverage has coverage elsewhere, that person is not counted towards the participation level. In this scenario, the group would be issued coverage because it would now be 7 taking coverage and 2 non-participating.

Your comment about one option being "no cost" does make one believe that all will participate. But keep something in mind, just because the employer tells the carrier that they are contributing enough to make that option no cost, there is no way to make sure this is true. So, if I am the underwriter and I receive the enrollment materials from your employer, and one person waives coverage and does not supply proof of coverage elsewhere, I begin to think that maybe the employer contribution is not high enough to make the one option no cost.

Bottom line, unless you want to make problems with your employer and fellow employees, just give it to him and let him get the coverage.

#3 CA Question

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Posted 11 February 2010 - 01:46 PM

I am not a lawyer, so I cannot address the legal aspect of your question. However, as a benefits person for over 25 years, I have seen this happen a few times.

Not knowing all the facts/details of this situation, my educated guess is that the group you belong to is being required to meet a certain level of participation. The carrier will have a certain minimum participation level (for example 75%) that your employer needs to meet so that coverage can be issued. So let's assume your group is 10 lives, with 7 enrolling and 3 not taking coverage. Your participation level is 70%. However, if one of the three not taking coverage has coverage elsewhere, that person is not counted towards the participation level. In this scenario, the group would be issued coverage because it would now be 7 taking coverage and 2 non-participating.

Your comment about one option being "no cost" does make one believe that all will participate. But keep something in mind, just because the employer tells the carrier that they are contributing enough to make that option no cost, there is no way to make sure this is true. So, if I am the underwriter and I receive the enrollment materials from your employer, and one person waives coverage and does not supply proof of coverage elsewhere, I begin to think that maybe the employer contribution is not high enough to make the one option no cost.

Bottom line, unless you want to make problems with your employer and fellow employees, just give it to him and let him get the coverage.


Thank you for the reply leevena. However I don't think your theory applies in my situation. I work for the state of CA which is a VERY large employer so I'm certain we are not missing our minimum participation level. The state has a history of not only being very intrusive when requiring documentation from its employees, but since we are public employees much of our personal information could be made public. As an example recently our local newspaper published a link where all state employees names, locations, and corresponding salaries were listed. This is public information and can be viewed by taxpayers. Now my friends and neighbors know how much I make. As a result, I am very careful of the documentation I submit to my employer. I am not certain what is considered confidential and what could be displayed on the internet if someone chose to dig it up. That's why I am questioning whether my employer legally needs proof of my other insurance coverage. I'm not trying to make problems with my employer and with others, I'm trying to prevent any for me.

#4 Don Levit

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Posted 12 February 2010 - 10:55 AM

Leevena:
I agree with what yous aid about the participation limits.
My experience has been that individual policies are not counted as coverage in force.
Any theories as to why?
Don Levit

#5 leevena

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Posted 12 February 2010 - 01:33 PM

I am not a lawyer, so I cannot address the legal aspect of your question. However, as a benefits person for over 25 years, I have seen this happen a few times.

Not knowing all the facts/details of this situation, my educated guess is that the group you belong to is being required to meet a certain level of participation. The carrier will have a certain minimum participation level (for example 75%) that your employer needs to meet so that coverage can be issued. So let's assume your group is 10 lives, with 7 enrolling and 3 not taking coverage. Your participation level is 70%. However, if one of the three not taking coverage has coverage elsewhere, that person is not counted towards the participation level. In this scenario, the group would be issued coverage because it would now be 7 taking coverage and 2 non-participating.

Your comment about one option being "no cost" does make one believe that all will participate. But keep something in mind, just because the employer tells the carrier that they are contributing enough to make that option no cost, there is no way to make sure this is true. So, if I am the underwriter and I receive the enrollment materials from your employer, and one person waives coverage and does not supply proof of coverage elsewhere, I begin to think that maybe the employer contribution is not high enough to make the one option no cost.

Bottom line, unless you want to make problems with your employer and fellow employees, just give it to him and let him get the coverage.


Thank you for the reply leevena. However I don't think your theory applies in my situation. I work for the state of CA which is a VERY large employer so I'm certain we are not missing our minimum participation level. The state has a history of not only being very intrusive when requiring documentation from its employees, but since we are public employees much of our personal information could be made public. As an example recently our local newspaper published a link where all state employees names, locations, and corresponding salaries were listed. This is public information and can be viewed by taxpayers. Now my friends and neighbors know how much I make. As a result, I am very careful of the documentation I submit to my employer. I am not certain what is considered confidential and what could be displayed on the internet if someone chose to dig it up. That's why I am questioning whether my employer legally needs proof of my other insurance coverage. I'm not trying to make problems with my employer and with others, I'm trying to prevent any for me.


Thanks for the update. To answer your question, the employer can ask for this info. It's up to you whether to provide it.

#6 leevena

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Posted 12 February 2010 - 01:43 PM

Leevena:
I agree with what yous aid about the participation limits.
My experience has been that individual policies are not counted as coverage in force.
Any theories as to why?
Don Levit


I'am sure that someone once told me, but I can't remember. My best guess is that it dilutes the "better" risk within the group. It's been over 25 years since I started, so I apologize for not remembering the exact reason.

#7 Don Levit

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Posted 12 February 2010 - 03:36 PM

Leevena:
That sounds as good a reason as any.
However, I wonder why other group coverage is honored as meeting the participation requirements, but similar individual coverage would not?
Don Levit

#8 LRDG

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Posted 05 April 2010 - 03:07 PM

I think your ER's requirement for proof of coverage might be the result of some confusion at a time when HIPAA was adopted, implementation of IRS Sec. 89 and simultanious amendments to IRS Sec. 125 non-discrimination requirements.

It was suspected by some that EEs who did not have or want coverage would simply opt out. Some confusion resulted and the proof of credible coverage that applies to HIPAA was in error assumed to apply to health plan coverage. The confusion to require proof of other credible coverage extended to insurers, administrators and plan sponsors. It lasted for a short period of time and I thought had all but disappeared over the years.

I believe eventually a compromise was arrived at. In lieu? of demanding EEs provide proof of coverage, (which BTW, had no legal enforcement anyway), ERs redesigned enrollment forms to include in addition to all their benefit options, included a provision in the form of a certified statement allowing EEs to decline coverage either because of existing coverage through a spouse or individual coverage. If I remember, it relates to the passage of Sec. 89 that became effective in 1989 and was repealed within 30? or 60 days.

It was an attempt to mandate coverage with the appearence of a mandate. After Sec. 89 was repealed, because it was so far reaching, many were unsure of what was actually repealed and what legislation remained through oversight.

#9 Chaz

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Posted 23 July 2010 - 02:55 PM

I would ask for clarification on why you need to show proof. There's got to be a certain reason why they need proof and if they don't know, then I wouldn't divulge the information. But even if you didn't have insurance, they can't force you to buy their insurance plan.

Many employers require proof of other coverage for the simple reason that they do not want their employees to go "bare" without coverage. It's a common requirement and does not violate any law that I am aware.