Rescission of Health Care Coverage

PPACA continues to evolve with updated HHS comments. The laws prohibits the rescission of health care coverage except for fraud or intentional misrepresentation of material fact. What does this mean? Failing to disclose pertinent information that would exclude or deny someone coverage. For example, a new employee who is not a legal resident, someone who fails to disclose medical information that would be important during the underwriting process or someone who enrolls a dependent who is not a legal dependent.

PPACA prohibits rescissions by group plans, absent of fraud or non-payment of premiums.. Retroactive terminations of coverage without a valid reason from the Group Administrator will not be accepted by the carrier. It is important for all employers and plan administrators to report either to Muneris or the plan terminations on a timely basis. The maximum credit for a retroactive termination will be 60 days and only with group attestation of the permissibility of such (as evidenced by an executed amendment).

Please make sure you stay abreast of new hires and any terminations. With PPACA, insurance carriers must adhere to the letter of the law.

Burman S. Clark

Burman S. Clark, RHU, CSA is the President of Muneris Benefits and a licensed insurance broker and consultant. His independent practice and focuses on employee benefits, individual life, disability, medical, and senior products. Burman has traveled extensively and provided guidance to large employer associations with regards to the Affordable Care Act.