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Two plans, no payments (health)

Mr. R. e-mailed OLHI because he was experiencing difficulty with the administration of his extended health care claims. He had an individual health insurance plan with Company A and he was also covered under his spouse’s group insurance plan with Company B.

For many years, he had submitted his health claims first to his individual plan, Company A, and then filed claims under his spouse’s group plan, Company B, for any residual expenses not covered by the individual plan. However, he was now being told by Company A to first submit his claims to his wife’s group plan. Mr. R. complied with this directive but Company B also refused to take responsibility as first payer. When he advised Company A of Company B’s response, Company A told him to sort the problem out himself.

As background, the health and dental benefits industry has developed a Coordination of Benefits (COB) Guideline that describes the order in which benefits are determined and how to coordinate health care or dental payments from all available group plans. Although there is no guideline prescribing the order in which benefits are determined for individual plans, there is a general consensus in the industry that group plans should be first payers. Company A was relying on this unwritten rule when it asked Mr. R. to file his claims with his wife’s group plan first.

The situation was further complicated by the fact that the group carrier, Company B, was not an OLHI member company and thus our Dispute Resolution Officer (DRO) was unable to open up a dialogue with Company B on Mr. R.’s behalf. By way of explanation, although all federally incorporated life and health insurers are required to belong to an independent complaint resolution service and most choose OLHI due to our expertise in the field, provincially incorporated life and health insurers are not subject to this requirement, although many do choose to become OLHI members.

In an effort to work out a solution, OLHI’s DRO wrote to Company A’s Complaints Officer pointing out that it did not appear fair that Mr. R. should be disadvantaged or expected to sort out the problem himself, but OLHI could not approach Company B as it was a non-member insurance company. Our DRO suggested that Company A should contact Company B directly on behalf of its policyholder to bring about a mutually agreeable resolution.

That same day, Company A responded. It agreed with our DRO that Mr. R., as their policyholder, should not be disadvantaged by these circumstances or required to sort through the issue himself. Company A further confirmed that it would resume responsibility as the first payer of his claims, in recognition of the problems he was encountering with Company B.

Mr. R. was understandably pleased that OLHI was able to have facilitated a settlement that ensured both insurance companies would resume administration and payment of his health benefits claims, as opposed to neither processing and paying his expenses.

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.