Webcast
KMCO Archives
Health
Care and the Law
(Originally
broadcast on April 26, 2000)
Hello everyone.
Welcome to the webcast of KMCO our series on Managed Care and
Children with Secial Health Care Needs. This program is brought
to you by Quality Community Managed Care Phase II project at
the School of Public Health, University of Illinois at Chicago.
The program today is Health Care and the Law. My name is Faye
Eldar and I'm the family coordinator for the Quality Community
Managed Care project. Our speaker today is Julie Justicz. Julie
is an attorney and director of advocacy at the SSI Coalition
for Responsible Safety Net in Chicago, Illinois. Her area of
specialization is government benefits and issues related to
children who have special needs.
Q.
In today's program we're going to be talking about health care
and the law and Julie I know many families who have children
with special needs are aware of the special education law idea
and that children have a right to education and related services
that they need and are wondering if there's a law like that
for health care or what exactly are the laws that are related
to health care?
A.
Thanks Faye, it's good to be joining your program today. The
health care area is a rather complicated mess if you want my
brief opinion. Some children throughout the country will get
medical services through Medicaid and other government sponsored
programs. And these are usually children who are what's called
categorically eligible for services and have low income and
family resources. However, for another group of children throughout
the country, there is not a comprehensive health care plan in
place and as a result, many families struggle to find comprehensive
insurance for their families. What we would like to do today
is address some of the laws that impact families in this particular
area. And rather than one comprehensive law, we'll find that
there are several laws that interact together and sometimes
not interact to well to help families get coverage and to give
them rights in certain instances.
Q.
Julie, could you please start off by telling us what are the
existing laws that do cover health care and who is able to benefit
from these laws?
A.
Okay. Let's start off talking about the Employee Retirement
Income Security Act (ERISA), which is a law that is not that
old but probably about 10 to 15 years old. And it's a law that
affects approximately 70 percent of all insurance plans right
now and all insured people. It's the program that primarily
applies to employee benefit plans. By that I mean plans that
are established or maintained by an employer and have the purpose
of providing medical care for their employees. Such plans generally
limit quite severely the legal resources that families have
when they want to challenge a denial of care to their family
member. The laws basically state that all claims are have to
go through the federal court system and the law has been fairly
restrictive over the years limiting the resources that families
have when an insurer denies them coverage.
Q. And
does the ERISA law apply to all employers or only certain kinds
of employers? A. It applies to most employer plans. However,
self-insured people typically are not covered by ERISA.
Q. What
is self-insured, Julie?
A.
Well a self-insured person let's start at the simplest case.
A self-insured person is someone who has a small business and
applies for insurance for themselves. Typically they'll enter
an agreement with an insurance company to provide them with
health care services in exchange for payment of premiums. For
an individual person, it will be simply a plan for exchange
of services in return for payment of premiums and the policy
that's issued will govern what is covered under that plan. Some
some employers run their own plan which is called an employer
plan and typically that that can be governed by ERISA in the
same way that any benefit plan will be because the employer
is retaining the discretion or authority to administer the plan.
Q.
Okay what does that mean for the consumer? Do they have the
same benefits as people with other kinds of insurance or not?
A.
Well ERISA can be problematic for the consumer, if you have
a policy that covers your services, it will spell out what is
covered and what's not covered. Let's say that you have a dispute
because you want to get a particular service covered and your
policy or plan does not cover that service. Under ERISA, typically
what you do is you follow the grievance procedure that's laid
out with your employer or your plan administrator who can be
your employer or someone designated by your employer. You may
have to file a grievance within 15 to 60 days after the denial
of coverage. You may then have a second step of review with
your employer or your employer's administrator. If you're denied
at that stage, your remedy is to go to federal court. However,
the ERISA laws have been interpreted by federal court to limit
your relief, your legal relief, to situations in which you can
establish that your employer's refusal to cover your services
was what's called arbitrary and capricious. A. It's a very hard
standard to meet. It's a legalese term, but it basically means
that your plan administrator or your employer abused their discretion
in refusing to give you services. What does that mean in layman's
language is it's really hard to win these kinds of cases.
Q.
But this is an important law that we do need to know about.
Now another insurance law that we've heard about is the Health
Insurance Portability Act. Can you tell us a little bit about
that?
A.
Yes I can. The Health Insurance Portability Act I think brings
a little more good news with it and this was a law that was
passed a couple of years ago and essentially it applies to both
people who are covered by employer's benefits plans and also
individuals. The law is designed to protect health insurance
coverage for workers and their families when they change or
lose their jobs. What protections does it offer? The primary
benefit that I see this law giving to families is that it limits
the time which a new group health plan can put on a pre-existing
condition exclusion. A pre-existing condition exclusion is a
provision in a insurance policy that says we will not we will
not cover condition ex. Let's say cancer. If if the person has
been treated for cancer in the previous six months, and we won't
provide any coverage for that condition. The Health Insurance
Portability & Accountability Act or HIPA says that no employer
can apply one of these pre-existing conditions exclusions for
more than 12 months. And more importantly, if someone has had
prior group insurance coverage through a group employer plan
or through Medicaid or Medicare, they can use this coverage
to reduce any pre-existing clause that would be applied under
a future group plan. So let's say I move from job A to job B
and I was covered under job A for at least two years. When I
go to job B, assuming there's been no break in my coverage,
job B cannot put a pre-existing condition limitation on me because
I've had coverage with a prior plan for more than 12 months.
Q.
So that means when the amount of time you have to work in order
to get on the insurance plan is over, they have to completely
cover you?
A.
That's correct. When you if you have at least 12 months of what's
called creditable coverage under an old plan, when you go to
a new plan, you will not be subject to a pre-existing condition
Q.
Okay does this apply also to the employee's children?
A.
Yes it will apply also to their independents and children.
Q.
Okay now I have heard from some parents when they have a baby
born who is premature or has a birth defect or some other medical
problem that they're told this is a pre-existing condition and
it's not covered. Does this does this law address that?
A.
They're saying that it's a congenital problem and will not be
covered in other words?
Q.
But they're calling it a pre-existing condition saying that's
the reason it's not covered.
A.
Ya, that's an interesting question because basically for HIPA
to apply, you have to prove that you've had creditable coverage
under another plan. So I'm not sure how it would work in that
case to be honest with you, Faye.
Q.
Okay but we have heard this from time to time from parents that
they have encountered this.
A.
Yeh I would want to challenge the insurance company perhaps
not under HIPA but under their plan itself to to state what
a pre-existing condition would be. You know in some cases they
might try and exclude a family up front like that. I think there
may be ways to get around that by challenging them through using
other laws.
Q.
Okay and if the parent is in a new job and they're waiting for
the new health insurance to start, what kind of coverage is
available for them?
A.
Assuming they've come from a prior job where they were covered.
Q.
They were coming from a prior job where they had insurance.
A.
Okay one thing that you can do is apply for your extension of
benefits under your old job through a plan through a program
called the COBRA which provides extension of benefits from your
old job for a period of time while you are waiting for new coverage.
And typically the COBRA extended coverage laws limit extended
coverage to 18 months or 29 months if the individual is disabled
or 36 months if you're the spouse or dependent of a deceased
insured or a divorce from the insured person. So this can be
a real helpful law for families to keep coverage going when
an insured person loses their connection with a prior job
Q.
Okay and does the law also say how the person is required to
find out about COBRA or sign up for COBRA?
A.
Well typically an employer has to notify a person when they're
leaving employment that they have ongoing rights to continued
coverage. This can get a little tricky because sometimes an
employer may not give notice at the time of termination but
may have given it previously. Most employers are pretty good
about issuing a new letter at the time of termination giving
folks information about their rights and telling them and giving
that notice through certified mail so they can assure that the
employee has received it. And you have a limited time frame
to elect to continue your COBRA coverage. Sometimes this doesn't
happen though. So it's good for folks to know before they leave
a job that this law is out there and if their employer doesn't
address it with them, they should immediately contact their
employer and let them know in writing that they wish to elect
this continuation coverage.
Q.
Doesn't COBRA also apply if someone gets divorced from the person
who is carrying their health insurance coverage?
A.
Yes that's correct. Coverage continues can continue for 36 months
for a person who is divorced from an insured person
Q.
Is there anything else that we should know about COBRA?
A. I
think that's the basic overview of COBRA that I'd like folks
to know about. Just that it can provide this range of coverage
while they're looking for other policies.
Q.
Is the COBRA insurance the same exact same insurance that they
had while they were on the job?
A.
Well the main difference is you can get the same policy. One
of the differences will be that you will pay up to a certain
percentage of what your employer paid, so you are going to be
paying the premiums, and for some folks that may be quite an
expense. Let's say your employer was previously paying 300 dollars
a month for you to receive coverage. You will be required to
take on that premium payment yourself once you are separated
from the employment or once the insured is separated from the
employment. So it's not the same benefit exactly in that you
will be responsible for premium payments. Otherwise the coverage
in terms of what services are covered will be the same. It does
provide folks some leeway when they're in between jobs and COBRA
coverage can be used under, as we talked about, HIPA before.
You can use your coverage under your COBRA plan to insure that
when you switch to a new group plan, you have continued coverage
and will not be subject to pre-existing conditions under the
new plan.
Q.
Okay and who is responsible for coordinating when COBRA ends
and the new coverage begins?
A. Well
the employee essentially. There are limits on how long you can
have COBRA coverage for and I discussed what those limits were
previously. But assuming you're going to be starting a new job,
you as the employee will want to make a decision about when
you're going to elect coverage under your new plan and one thing
you're going to want to check in to is what is covered under
your new plan versus what was covered under your old plan, what
pre-existing conditions may be applicable to you and so on.
So it's a good idea once you start a new job to get a copy of
the insurance contract or plan and see what your range of benefits
is available and compare and contrast those so you can insure
that you're getting maximum protection for you and for your
children.
Q.
Okay. Now Julie, I have another question for you. Does the Americans
With Disabilities Act apply to health insurance?
A.
That's a complicated question, Faye. It's the Americans with
disabilities Act is divided into several areas and one of the
areas governs places of public accommodations, and there have
been some discussions recently about whether the law would apply
when an individual is insured through an individual insurance
plan. Would the contents of the insurance policy be governed
by the ADA? The courts around the country are answering that
questions in different ways. Some courts have said that the
contents of the policy are covered by this law. So for example
an insurer could not say we will cover people with all disabilities
except for HIV. Other courts have said that the ADA does not
apply to these insurance contracts and the ADA Title 3 provision
is only intended to apply to access type issues. So an insurance
company has to have accessibility for wheelchairs, physical
access, but doesn't apply to the contents of the policy. The
ADA does, however, apply to employee/employer relationships.
So to some extent under Title 1 of the ADA, you would have protection
by this law.
Q.
Okay now I want to know if a family doesn't agree with the decision
that's made by the insurance company related to their child,
what kind of legal remedies are available to them?
A. Okay
let's start out looking at the type of insurance they have.
If we begin with one of the most common types of plans, which
is an employee based plan, typically the plan will state what
the grievance procedure is for the family to follow if they
have a dispute about coverage. The first step is usually putting
it in writing, and stating why you disagree. The plan administrator
will then make a decision either upholding their decision to
deny coverage or reversing that decision. Once that decision
is made, the individual can either live with the decision or
if they've exhausted the appeal or grievance procedure that's
set forth in the policy or plan, they may be able to take their
case to court. If it's an employee benefit plan covered by ERISA,
the federal law, then the remedy would be to take it to federal
court. As we mentioned earlier in the program, it is pretty
tough to win these cases unless the plan administrator has made
a decision that the court deems arbitrary and capricious in
denying coverage to the to the family.
Q. How
can a family find legal assistance to help them with an appeal
like this?
A.
There are a number of attorneys who specialize in ERISA cases,
and because there are some attorney fees provisions involved,
it may be possible to get help on these kinds of issues by contacting
your local bar association and asking for lawyers who specialize
in this particular area. But families should know that when
they take these actions to court, ERISA does limit their legal
remedy. And typically the remedy would be for denial of coverage
would be a requirement that the insurance company pay for the
coverage that was denied. What typically happens in these cases
is that that remedy is too little much too late to benefit the
family. So it can be a real problem if two years from now you
get a remedy from the court that says yes you can have this
coverage that we denied you two years ago. So ERISA on its down
side does not allow for large awards of damages in situations
where family members had severe losses due to an insurance company's
failure to provide coverage.
Q.
And for starting out with an appeal, do people need a lawyer
or can they do that by themselves?
A.
No they don't need a lawyer right away starting out with a grievance
procedure. I would, however, be inclined to try and get an attorney
involved. If the amount of the dispute involved is large or
if the insurer is contending that the treatment you need to
live is experimental. Once the matter goes into arbitration
or a lawsuit, at those points you might want to get a lawyer
involved to really best protect your rights because this is
a very complicated area of law and I would want families to
be protected once they get to those levels.
Q.
Does it make any difference in going after an appeal if the
family is covered by a Managed Care organization versus a standard
type of insurance?
A.
Well ERISA does essentially have loopholes which prevent Managed
Care providers from being held legally responsible in a lot
of situations. Now if a person is suing an HMO for denying them
certain kinds of treatment, typically ERISA will prevent liability
in these types of situations. If a person, however, is suing
for medical malpractice, they may be able to get benefits that
way. But when you're when you're suing for denial of coverage,
ERISA will typically preempt the case and in most cases limit
benefits that will be paid to people who sue.
Q.
I think for parents of children who have special health care
needs, one of the things that we hear about most often that
they have not been able to access from their health plan is
either a referral to a pediatric specialist who treated their
child's condition or ongoing referrals for therapies like physical
therapy, speech therapy and occupational therapy. Do you have
any advice about that?
A.
I think it's a good idea if you can get an attorney involved
in these issues to make the calls to the insurance company and
basically a lot of times these cases can be resolved by someone
pressuring the insurance company, looking at their policy, looking
at the language of their benefits and their exclusions and their
conditions and arguing with the insurance company over the interpretation
of these provisions. Every policy, as you know, between an insurer
and an insured will detail what services are covered. But in
the fine print, there will be lots of exclusions and so on that
will serve to limit the coverage. What lawyers can often do
in these situations is insure that the policy is interpreted
to the individual insured person's best advantage. There's a
general rule of contract law that applies in individual insurance
cases and under ERISA that says the policy will be construed
against the entity that drafted it, which is usually the insurer.
And getting lawyers involved at this level to insure that you're
getting the maximum benefit from your policy can get you the
services up front.
Q. And
what would somebody need to do in order to pursue this?
A.
Well once again you could try calling agencies in your local
areas that specialize in providing representation to low income
families of children with special health care needs. In the
Chicagoland area, the SSI coalition does some of this work and
there may be other sources throughout the country that assist
families. If you can't find such a resource in your area, you
may want to contact your local bar association and ask for referrals
to lawyers who specialize in insurance and ERISA.
Q. Julie,
one of the things that I often hear from families is that they
have contacted an organization like Legal Assistance and found
that they are above the income guidelines and they don't qualify
but they really can't afford the fees of a private lawyer. Are
there any other kinds of options for them?
A. That
is a tough area because a lot of folks fall within the range
of or above the range of the federal poverty guidelines which
would govern legal services but still are not really able to
afford the costs of a lawyer. And that can be a real problem
for them. There are some legal clinics that operate on a sliding
scale basis and there are a number of attorneys who do take
these kinds of cases ERISA cases because there will be attorneys
fees provision if they are able to win the case. So families
without income may still be able to get attorneys who will work
on an attorneys fees basis and if they win the case, collect
attorneys fees.
Q.
That means the attorney gets a percentage of the award?
A. Typically
what they would do in those cases at the end of the case if
they win, they would petition the court for their reasonable
attorneys fees and they would have to document how many hours
they've spent and the court would pay them their attorneys fees.
It's different than a contingency award where they would take
a percentage of what the individual wins. Because as I've said
in a lot of these ERISA cases, there are not large damage awards
that will come to the families. But it is difficult to get an
attorney when you fall in that category of people who don't
qualify for legal services and can't afford for an attorney
paying on an hourly basis or paying a large retainer to get
them going.
Q.
Are there any other laws related to health care that you feel
we need to know about?
A.
Let's see we've covered COBRA and ERISA and the Health Insurance
Portability Act. One other piece one other law that's relatively
new in this area is the Mental Health Parity Law which, like
some of the other laws we've talked about, has some really good
pieces to it and on closer examination also has some problems.
Let me just talk briefly about this new law. Mental Health Parity
Act went in to affect in 1998 I believe and it basically provided
that an insurer who provides mental health coverage cannot put
a dollar limit on these benefits if those similar dollar limits
don't apply for medical and surgical benefits, which is a really
good thing and a great step forward. The problem is that the
law still allows an insurance company to put other restrictions
on a coverage.
End of transcript.
