Pregnancy as a pre-existing condition under self-funded health plan pr

[Guest WDH]

The employer has a self-funded group health plan with a plan year beginning June 1. An employee and his spouse become covered on July 1, 1997 after satisfying the waiting period (HIPAA does not apply). The spouse is approx. 2 months pregnant on the July 1 effective date, but has not seen a doctor yet. The plan has a pre-existing condition exclusion that applies to injuries and illnesses that first manifest themselves before the coverage date. Spouse experiences complications with her pregnancy in October that result in a successful c-section birth after a 2-week hospital stay. The plan denies the claim on the basis that the spouse was pregnant prior to the coverage date and all claims related to the pregnancy are excluded under the pre-existing exclusion. Any specific case law supporting the denial under these circumstances? Thank you.

[Larry M]

[i am not an attorney]

It is my understanding the answer to your question is "it depends upon the precise wording of the plan document.

There have been at least two cases (prior to HIPAA) which involved pregnancies which began prior to the effective date of coverage and which terminated during the period of coverage for medical benefits.

The results went in opposite directions in the two cases because of the contract (plan document) language.

In one case (Vance v Aetna Life), a plan administrator acted consistently with plan provisions in denying maternity benefits to the spouse of a covered employee on the basis of the plan's exclusion for preexisting conditions. The employee's spouse received her initial treatment for the pregnancy prior to the effective date of the employee's coverage, and the preexisting conditions clause excepted coverage during an employee's first 12 months for “preexisting conditions” defined to include conditions for which a person received services during the three months before being covered.

In the second case (Aubrey v Aetna - hmmm, Aetna gets around, doesn't it?) a plan administrator denied maternity benefits for prenatal care expenses arising after the effective date of a participant's coverage, where the participant had become pregnant before coverage commenced.

This plan contained a preexisting condition clause precluding benefits until three months had elapsed after any previous treatment and a provision that pregnancy would be treated as any other disease. HOWEVER, it also provided that maternity benefits would be paid regardless of whether pregnancy had commenced during the coverage period.

The administrator's argument was the conflicting provisions should be read together so as to allow maternity benefits only where pregnancy began – but was not diagnosed or treated – within three months of coverage commencement.

However, it was determined that the participant's interpretation – that post-coverage benefits would be payable regardless of the preexisting conditions clause – was correct.