Case Study – Page 3 – OLHI – Free, impartial help with your life & health insurance complaints

Going the distance (health)

Posted on: June 16, 2016

Mrs. O. had lung cancer and lived in a small, remote area of her province. She needed radiation and chemo therapy and chose to go to a city about 400 kilometres away. Her provincial health care plan reimbursed her for travel and lodging expenses if she had to consult a specialist outside her region. Her group health insurance policy, through her employer, reimbursed her for the rest of what the provincial plan did not cover.

When Mrs. O. submitted her claim, her employer’s insurance company declined it. They said she should have gone instead to a hospital that was closer to her home by 30 kilometres than the other hospital she went to. The insurance policy required that she travel to the closest hospital.

Mrs. O. brought the final position letter to OLHI for a free, independent review of the case. She told our Dispute Resolution Officer (DRO) that traveling to the other hospital would have taken longer in travel time, even if it seemed closer from a distance perspective. She also said she chose the hospital she went to because her specialist was affiliated with it.

OLHI’s DRO reviewed all the information provided by Mrs. O. and by the insurance company. He discovered that the insurance policy carefully outlined reimbursement if a specialist was located more than 200 kilometres away from the person’s home, so long as the specialist was as close as possible to the person. Proximity was based on kilometres, not travel time. The DRO also learned that the provincial plan had declined reimbursement for the same reason.

After thorough review of the policy and discussions with Mrs. O., OLHI explained what the policy said and why Mrs. O. was not able to be reimbursed. The DRO also explained that, for this reason, OLHI believed that the insurance company had made the proper decision.

Disclaimer: Names, places and facts have been modified in order to protect the privacy of the parties involved. This case study is for illustration purposes only. Each complaint OLHI reviews contains different facts and contract wording may vary. As a result, the application of the principles expressed here may lead to different results in different cases.

Hidden history (health)

Posted on: June 16, 2016

Mr. Q. wanted to buy new glasses through his employer’s group health insurance plan. Employees could only buy new glasses every two years – a standard period for many plans. He could not remember the last time he bought glasses.

Logging onto the insurance company’s website, Mr. Q. accessed his personal list of transactions made over the last two years. He did not see any purchase for glasses during this time so he bought new glasses and submitted his claim.

The insurance company denied Mr. Q.’s claim because he had in fact purchased glasses the prior year. They said that this claim was listed under the website’s section about “My Claims” – and not under “My Transactions.” They explained that there were two lists on their website: one for claims that an employee filed online (My Transactions) and one for claims that employees filed manually (My Claims). Because Mr. Q. had submitted his glasses claim last year manually, it did not show up on his list of “My Transactions.”

The insurance company suggested that if Mr. Q. was dissatisfied with the decision, he could contact OLHI for a free, impartial review. He brought his final position letter to OLHI and a Dispute Resolution Officer (DRO) started to review his case. Mr. Q. explained to the DRO that the insurance company’s website doesn’t direct people to look under both sections. Mr. Q. felt that a reasonable person would not think to check both places as a list of transactions implies all transactions ever made through his benefit plan.

OLHI’s DRO noted that Mr. Q. had a point: the website did not warn that an employee should look at both lists because each list showed a history of claims transactions depending on the way they were submitted. For this reason, OLHI contacted the insurance company and explained how confusing the process could be for an employee and how a mistake of this nature could be made.

The insurance company agreed to reimburse Mr. Q. for half of the cost of the glasses and he accepted this offer.

Precautionary treatments (critical illness)

Posted on: June 16, 2016

Ms. K. adopted her daughter and enrolled her in a child development program (CDP), as recommended by the adoption agency.

At the CDP, an assessment showed motor problems, including an irregular gait. The next month, Ms. K. applied for critical illness for her daughter. In the telephone interview portion of the application, she said that her child had not been diagnosed or treated for development delays or bone, joint or muscle disorders. Ms. K. also said that her daughter did not have any other illnesses or conditions, and received no consultations or treatment from alternative health care providers.

Four days later, the physiotherapist at the CDP told Ms. K. that the child’s motor skills were of concern. Later that month, as a part of the insurance application, Ms. K. signed a declaration of good health. She confirmed, again, that since beginning the application, her daughter had not consulted with doctors or any other health care providers, nor had she undergone any diagnostic tests or investigations. Ms. K.’s daughter was approved for a $100,000 critical illness policy.

Two years later, a pediatrician outside the CDP diagnosed the daughter with cerebral palsy and Ms. K. applied for the policy benefit. The insurance company denied her claim for failing to disclose material facts during the application and in the declaration of good health. They provided a full refund of the premium.

When Ms. K. contacted OLHI, a Dispute Resolution Officer (DRO) carefully reviewed all the files sent by her and the insurance company. The DRO spoke with her to better understand her position. Ms. K. felt the CDP did not provide medical diagnoses – and the daughter was diagnosed long after the policy was issued.

OLHI agreed that the insurance company’s decision was sound. Although Ms. K. may have honestly believed that her daughter was in good health until long after she applied for the insurance, she incorrectly answered questions related to evaluations, investigations or consultations with health care providers or practitioners. These evaluations and consultations did take place at the CDP.

Steady work (disability)

Posted on: June 15, 2016

Ms. H. worked at the front desk of her family’s automotive shop. Her responsibilities were administrative in nature: assisting customers on the phone and in person, processing warranties, selling parts over the counter and traveling around the city to pick up parts. In October, she applied for disability under the company’s group plan, indicating on the application that she was diagnosed with a respiratory disease.

Three months later, Ms. H.’s family doctor recommended that she be treated with steroids and other medications for respiratory tract infections. She concluded that Ms. H. was not fit for work, except for very sedentary work in a clean environment that would not affect her respiratory disease. Ms. H applied for and was granted disability through the Canadian Pension Plan because her chronic illness and limitations met CPP’s definition of “disabled.”

Ms. H.’s insurance company, through her employee group plan, however, declined her disability claim. They said she had suffered from respiratory problems for many years, before the insurance coverage began. This made her illness pre-existing. The company also said that she was not permanently employed for 24 hours per week and was therefore not insurable.

OLHI became involved when Ms. H. sent us the company’s final position letter and all her documentary evidence. She explained to our Dispute Resolution Officer (DRO) that she was very unwell and unable to work a steady job. The DRO reviewed Ms. H.’s paperwork, as well as files that the insurance company sent. Medical reports confirmed her condition was worsening and made work impossible. With this information, the DRO recommended an OmbudService Officer (OSO) investigate.

The OSO discovered in the insurance policy booklet that an employee’s eligibility for benefits is based on the number of hours worked. A minimum of 24 hours of work was required each week. Ms. H.’s employer could not provide evidence of her hours worked and also admitted that they had paid her when she was ill, even when she did not work. Despite her illness, and despite the insurance company’s empathy, the OSO agreed that Ms. H. could not be covered under the plan.

If the shoe fits… (disability)

Posted on: June 15, 2016

Mr. N. was a 54-year-old floor porter, moving packages, equipment and other items around a hospital emergency room. His job required him to be on his feet eight hours a day. His uncontrolled diabetes led to a bone infection in his right big toe and he went on disability benefits through his employer’s group insurance plan. The insurance policy provided disability payments for the first 24 months so long as Mr. N. was not able to perform the essential duties of his job.

For the first six months, the insurance company paid Mr. N.’s disability benefits. Then, the company stopped, explaining that his infection was resolved and his condition did not prevent him from returning to work.

Mr. N. brought the company’s final position letter to OLHI. He told our Dispute Resolution Officer (DRO) that he could not return to his job because it required that he wear safety shoes. The bone infection had caused a deformity and limited sensation in his leg. The constant friction caused pain when he wore safety shoes. Additionally, he had dizziness from his diabetes.

Our DRO carefully reviewed all Mr. N.’s files, as well as the files sent by the insurance company. She learned that Mr. N.’s medical records confirmed that it was unlikely he could return to work in steel-toed boots. He was unable to properly stand on his feet, his walking was slow and his reflexes impaired. Mr. N.’s employer also confirmed that safety shoes were mandatory for the job.

The DRO recommended an OmbudService Officer (OSO) conduct a further review based on merit, given the physical nature of Mr. N.’s work. The OSO contacted the insurance company after his own through review, recommending that the medical evidence was quite definitive and prevented Mr. N. from performing the duties of his job. The insurance company agreed and continued to pay for his disability benefits for the rest of the 24 months.

A limitless drug plan (health)

Posted on: June 15, 2016

Mrs. E.’s employer provided everyone in her company with extended health care coverage through a group plan. The plan reimbursed her for 80% of her drug costs, with no limit on cost or any other limits. On her 75^th birthday, her company benefits would end.

When she was 35, Mrs. E. was diagnosed with a severe liver disease. Her doctor, the leading Canadian specialist in this disease, prescribed Drug A, which costs more than $500,000 per year. It was clear that Mrs. E.’s condition would require life-long treatment.

For the first three months, Mrs. E. was reimbursed for the drugs. Afterward, the insurance company told her that another drug (Drug B) was available for free through a special provincial drug plan that covered expensive therapies. The insurance company declined her future coverage for Drug A.

Mrs. E. appealed this decision. The insurance company’s Ombudsman recommended that the claims department speak with her doctor. This doctor told them that Drug A was prescribed only because he did not want to burden the public plan with the cost of the medication, since Mrs. E.’s group plan provided ample coverage. In its’ final position letter, the insurance company declined payment, explaining that there was no reason why Mrs. E. could not take the free Drug B. The company told Mrs. E. that if she was not satisfied with the decision, she could ask OLHI for an independent, impartial and free review of the case.

Not long after, OLHI received a request to become involved. Our Dispute Resolution Officer (DRO) carefully reviewed the insurance policy, noting that there were no limits on the dollar amount for drug claims and there were no other limits or exclusions. Going through the insurance company’s files, he saw a comment from the company’s Ombudsman noting the same things and suggesting that the claims department reconsider the denial. The DRO recommended this be escalated to an OmbudService Officer (OSO) for further review, particularly because he was unsure about whether Mrs. E. would even qualify under the special provincial plan.

OLHI’s OSO discovered that Mrs. E. could get full coverage for not only Drug B but also for Drug A through the provincial plan. As a result, the insurance company did not have to continue paying for her treatment.

Objective medical evidence (disability)

Posted on: February 2, 2016

Ms. V. was being treated for major depression and anxiety disorder. Her insurer accepted her disability claim on the basis that she was not able to perform the essential duties of her job as an office manager of a busy, professional firm.

Midway through that benefit period, the insurer discontinued her group benefits because Ms. V. opted to try to start her own business out of her home. The insurer’s final position was that the objective medical evidence on file suggested that her impairment was not sufficiently severe to prevent her from returning to her pre-disability job.

Ms. V. contacted OLHI for an independent, free review of her case. Our Dispute Resolution Officer (DRO) gauged that the diagnosis, symptoms and treatment hadn’t changed from the period during which Ms. V. received disability coverage. For this reason, he recommended the case be investigated by an OmbudService Officer (OSO).

OLHI’s OSO reviewed the file and questioned how, with the evidence on file, the insurer could conclude that Ms. V. was able to resume performing the skills of her prior demanding, managerial role.

The OSO contacted the insurer, asking them to consider that a job as an office manager of a busy firm could not be equated with a home business. He also suggested that the medical evidence was clear that Ms. V.’s condition had not changed between the last day of paid benefits and the first day of denied benefits.

Upon further discussion and review, the insurer agreed and provided Ms. V. with payment for the period that correlated with her inability to perform the essential duties of her job.

Honouring a commitment (life)

Posted on: February 2, 2016

Thirty years ago, Mrs. B. purchased life insurance. The premium would change over the years and the cash surrender value would be flexible but, as she understood it, she was guaranteed a paid-up $200,000 policy at age 65. This original policy was subsequently transferred to several insurers over the years.

When she turned 65, Mrs. B. received a letter informing her that her policy was now paid up; no more premiums were necessary to maintain the value of $200,000 and to keep her policy in force. Mrs. B. stopped making payments but, several years later, received a letter advising that her policy was now valued at $158,000.

Although no further premiums were required to keep the policy in force, the insurer stated that the sum insured continued to be reviewed for adjustment. Mrs. B. disagreed and contacted OLHI for a free, independent and impartial review of her file. She provided us with the final position letter and copies of all her correspondence with the various insurers that had owned the policy over the years. We also received the current insurer’s file.

OLHI’s first impression was that there would likely be no grounds to negotiate as the decrease in the sum insured was likely contractual.

However, OLHI’s Dispute Resolution Officer (DRO) discovered that Mrs. B. had a letter from the original insurer, guaranteeing in writing the sum insured of $200,000, with no adjustments to that sum. For this reason, the complaint was escalated to an OmbudService Officer (OSO) for further investigation.

Speaking with the insurer, the OSO concurred that the policy clearly outlines the recalculations of the premiums and the fact that the sum could change after age 65. However, he also noted that the guarantee letter could not be overlooked. The insurer, after additional review, agreed to honour the commitment that the previous insurer had made, confirming that the sum insured would not be recalculated in future.

Was he ready to return to work? (disability)

Posted on: February 2, 2016

Mr. G. went on a medical leave from work for a year, due to a mood disorder that included depression. During this time, through his group insurance plan, his employer covered his disability benefits. But after a year, the insurer terminated benefits upon receiving information from Mr. G.’s doctor that he was planning on returning to work. He did not, though, as his psychiatrist stated that he was unable to. The insurer completed a medical investigation and, in its final position letter, wrote that Mr. G. was not completely disabled and could return to work.

Mr. G. contacted a Dispute Resolution Officer (DRO) at OLHI. The DRO discovered that while Mr. G.’s doctor had recommended he return to work, his psychiatrist did not support the finding and felt that Mr. G. was still suffering from a severe disorder. For this reason, the DRO recommended the complaint be escalated to an OmbudService Officer (OSO) for investigation.

As a part of his review, the OSO spoke with the consumer as well as the insurer and went through all the documents that both parties shared with him. The medical reports revealed that even after his disability payments stopped, his psychiatrist continued to treat Mr. G. for his illness. The OSO also discovered a crucial detail: that the insurer’s decision to stop disability payments was based on a conversation with Mr. G.’s psychiatrist, where he said Mr. G. had quit his job. However, the transcript of this telephone conversation did not match formal reports. Mr. G. explained to the OSO that his psychiatrist may have confused the fact that he quit another job many years earlier.

The OSO reached out to the insurer, requesting they confirm with the employer whether Mr. G. had in fact quit or was still employed and on leave. The employer was able to confirm that he had not quit his job. After some further discussion, the insurer agreed to reconsider and made a settlement offer. Mr. G. was thrilled to reach a settlement – and was also very appreciative of the way the OSO was able to explain his case in plain language to him so that he could better understand how the insurer reached their initial decision.