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May 2015

Which Health Plan Is Responsible When Your Employer Switches Health Plans While You Are In The Hospital?

If you are like most people, you obtain health insurance through your employer and you have been hospitalized at least once during your lifetime. So what happens when your employer, from whom you obtain your health insurance, changes health plans while you are hospitalized? Years ago, many group health plans did not provide health benefits to hospitalized plan members for healthcare they received after their plan terminated. Such care was denied even though the hospitalization for such health plan members began before the expiration of their coverage. And the employers’ replacement group health plans would also refuse to cover the remainder or continuing portion of the hospitalization. As a result, due to no fault of their own, patients were left without coverage for the latter part of their hospitalizations.

Fortunately, patients are now provided with more protection when employers change health plans. For example, under current California law, the terminated group health plan is required to continue to pay for hospital and medical expenses relating to an existing hospitalization for at least 12 months after the plan has expired. This is true even though the law in California provides that a replacement group health plan cannot refuse coverage to a person that is hospitalized at the time the prior health plan expired. That coverage requirement however is not a requirement that the replacement group health plan pay benefits for the disabling condition that initially lead to the hospitalization. As explained above, that requirement remains with the terminated group health plan. However, the replacement group health plan may be required to pay medical expenses for other non-related conditions.

Note that the terminated group health plan’s benefits may cease when the patient is no longer in need of hospitalization or when a replacement group health plan elects to provide coverage to that patient without limitation to the condition.

SAC recommends that patients provide hospitals with information regarding ALL their health plans. Such plans should include terminated or prior group health plans, replacement group health plans, and any other health insurance that they may possess. This is one way that patients can insure that they are not left with a large hospital bill!.

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