What is private indemnity insurance?

Private indemnity or "fee for service" insurance can be obtained by individuals on their own, or through groups, such as employers or associations, and allows some level of choice of health care provider by the insured. When private indemnity insurance offers a more limited choice of providers, is it is typically referred to as Preferred Provider Plan, as your choice may be restricted to health care providers who are members of the sponsoring insurer's Preferred Provider Organization or PPO, or receive a reduced level of reimbursement when you see a provider who is not a member of the PPO.

I currently am on worker's compensation. Can my employer make me pay for my own health insurance while I'm off?

The employer generally has no obligation to maintain health coverage at its expense, although you probably have a right to COBRA it. Also, check the firm's long term and short term disability policies. Depending on what state you work in, your rights may be also different under some states' workers comp laws.

What is health insurance?

Health insurance is, basically, a promise by an insurance company or health plan to provide or pay for health care services in exchange for payment of premiums.

Health care in the United States is delivered and insured in many different ways.

Suppose the contract or booklet is ambiguous or unclear?

The law generally provides that the plain meaning of an insurance policy, plan or evidence of coverage governs its meaning and construction. The policy or plan must be read as a whole in order to determine the reasonable meaning of the terms and the intent of the parties, and be consistent with the intended goal of the insurance or plan. If, a policy or plan term is ambiguous, or there is a conflict between terms in the policy and/or evidence of coverage the law generally provides that the policy or plan language should be construed in favor of the insured or member and against the insurer or plan.

In addition to consulting both the policy or plan and the applicable evidence of coverage document, determination of what a coverage or benefit is requires, as to any particular coverage or benefit, a reading of all applicable "definitions," "benefits," "limitations," and "exclusions" contained in the policy or plan and the evidence of coverage.

Would I need a lawyer to handle my case?

Given the complexity of the legal issues involved and the tendency of insurance companies and health plans to vigorously defend claim denials, especially after appeal and grievance procedures, evaluation of any potential legal claim on behalf of an insured or plan member should be undertaken by an attorney experienced in insurance claims and bad faith litigation. Cases against health insurers and health plans resulting from claim denials, including bad faith remedies, are frequently undertaken on a contingency fee basis whereby the attorney investigates and evaluates the case before filing a complaint, advances the costs of investigation and litigation, and is paid attorney fees only if there is a recovery. In the event of recovery, the attorney is paid a percentage of the recovery as attorney fees. While the details of contingency fee contracts may vary from state to state, and within a state from attorney to attorney, as a general rule the typical contingency fee is 25 to 33-1/3% of the value of benefits or services recovered and 33-1/3 to 40% of any extra contractual or tort damages, such as emotional distress and punitive damages recovered.

How do I determine what my health care coverage or benefits are?

The primary insuring document is always the health insurance policy or the health plan service agreement; these are the binding contracts between insurers or plans and their insured or members. If the insurance or plan is obtained by an individual directly, the individual usually has a copy of the policy or plan agreement. In addition, or sometimes instead of the policy or plan, the insured may also have a summary or brochure, which is legally known as an "evidence of coverage." If you have health insurance or a health plan through an employer or group, you usually do not have a copy of the insurance contract or plan agreement, but rather only has a handbook, summary, brochure or other type of evidence of coverage. In either circumstance, it is the actual insurance policy or plan agreement that controls what the coverage and benefits are, with one important exception. Generally, the law provides that evidences of coverage, whatever their form, may operate to expand or increase the coverage or benefits available, but they may not operate to decrease or limit the benefits and coverage available below that which is provided in the insurance policy or plan agreement. Therefore, if there is any question about whether a benefit or coverage is available, you as an insured or plan member should read and compare the language about the particular benefit or coverage in both the policy or plan and the related evidence of coverage.

What are my legal remedies if a health insurance company or plan refuses to pay a claim for a benefit or service?

In a circumstance where an insurance company or health service plan (HMO) has denied a claim for a benefit or service, has upheld the denial through internal appeal and grievance procedures, and ERISA does not govern the policy or plan, an insured or plan member who has been denied a benefit or service can sue on a number of legal theories, including breach of contract, breach of the implied covenant of good faith and fair dealing (bad faith) and under some circumstances infliction of emotional distress and fraud.

The two primary legal remedies available in most cases are breach of contract to recover the value of the denied benefit or service and any incidental damages and bad faith. Bad faith is the unreasonable denial of a benefit and may allow recovery for emotional distress, interest on out-of-pocket losses, damages for any attorney fee obligations incurred and, in limited circumstances involving malicious or willful misconduct, punitive and exemplary damages. These legal remedies are ones that are available under state law, not federal law. In addition, especially with regard to the tort remedies of bad faith, infliction of emotional distress and fraud, the availability of the remedy and the nature and extent of damages recoverable vary from state to stat.