Answers To Your Insurance Questions

INSURANCE QUESTIONS

Answers provided by Andrew W. Vorzimer, Esq., Lori S. Meyers, Esq. and Milena D. O’Hara, Esq.

VORZIMER, MASSERMAN, ECOFF & CHAPMAN  (323-782-1400)
Biographical Note

            Mr. Vorzimer is admitted to the State Bar of California; United States District Court, Central, Eastern, Southern and Northern Districts of California; and the United States Court of Appeals, Ninth Circuit.

Mr. Vorzimer attended Harvard University; University of Miami (B.B.A.); and Whittier College School of Law (J.D. Magna Cum Laude. Mr. Vorzimer also was the Executive Editor of the Whittier Law Review. In addition, he was a Teaching Assistant at the Whittier College School of Law.  Mr. Vorzimer is the Legal Moderator for the International Council on Infertility Information Dissemination (INCIID).  

1.         Do you think that when you call your insurance company prior to making a decision about the course of your treatment that you are raising a “red flag” or are you getting information that will help you make your decision?

           It is important to exercise extreme caution when contacting insurance companies directly to request specific information about your policy. Whenever possible, confine your inquiry to a confidential “cold call” wherein you do not otherwise disclose your personal identification number, account number, legal names, or any other identifying information about the parties involved in your assisted reproductive arrangement. Perhaps most importantly, do not refer to the fact that you are inquiring specifically about surrogacy or any other fertility coverage issues. Confine your call to a general request about maternity coverage and related exclusions and limitations that might apply. While you should never withhold information from your insurer, for purposes of obtaining a copy of your policy coverage in order to assess the applicability of coverage, there is no reason to disclose your particular circumstances at this stage. Clearly, upon commencement of the medical procedures, this information will be provided to your insurer.

2.        What is COBRA?

           COBRA was initiated in 1985 through the Consolidated Omnibus Budget Reconciliation Act and the Tax Reform Act of 1986 and is commonly referred to as “continuation coverage.”    These Acts permit individuals receiving medical benefits, generally from an employer, to obtain benefits after major medical insurance benefits have formally ceased. Coverage may also be elected in the event of divorce, legal separation and/or death of a subscriber.  COBRA may not be awarded in the event that a particular subscriber loses coverage due to gross misconduct, negligence or malpractice.  This type of coverage is often offered at an increased cost to the employee in the event insurance benefits are lost due to termination or a reduction of hours of employment. The increase in cost will vary policy to policy, and in some cases is quite substantial. Thus, it is worthwhile to investigate obtaining an alternative policy before coverage ceases prior to assuming COBRA benefits in order to ensure maximum benefits at the most reasonable price.

            Employers with more than 20 employees are federally obligated to offer COBRA insurance to employees. This refers to the number of employees employed, not the number of employees covered by a health plan, and includes full-time and part-time employees.  Employees are generally only offered COBRA benefits if they have been employed in the same position for a specific period of time (often 24 continuous months). Some policies offer COBRA coverage only in the event that the member is disabled and unable to perform daily work activities and must remain under a doctor’s care. 

            COBRA may also apply in the event an employee qualifies for an approved family or medical leave of absence (as defined in the Family Medical Leave Act of 1993) if insurance contributions continue by the member. The employer must provide the member with prior written notice of the terms and conditions under which such contributions are made.  In most cases, COBRA benefits will cease if the member fails to make payments within 30 days of the due date established by the employer. Subject to certain exceptions, if the member fails to return to work after the leave of absence, the employer has the right to recover from the member any contributions toward the cost of coverage made on your behalf during the leave or the employer may retroactively terminate coverage to the date the premium was last received.

            In the event that COBRA coverage is elected by a member participating in an assisted reproductive arrangement, it is important to be cognizant of the amount of time extended through the COBRA policy. Many COBRA policies are only offered for a limited period of time. COBRA coverage must be offered by such employers for a minimum of 12 months with many policies allowing for COBRA coverage up to 36 months.  If a COBRA member becomes eligible for Medicare, the COBRA period expires or any other group insurance is obtained, the member will not be eligible for further COBRA coverage. Thus, it becomes critical to remain sensitive to the timing of individual cycles to attempt a pregnancy and carefully calculate the number of months required for coverage to ensure that COBRA coverage will continue throughout the desired dates required for an individual assisted reproductive matter.

3.         Are there any generalizations you can make about insurance coverage or is each  policy unique?

           Insurance policies vary considerably in the type and extent of coverage offered, in addition to the price of the premium itself. More expensive insurance does not necessarily equate to better or increased coverage, especially when it refers to maternity and/or infertility benefits.  Some policies continue to offer coverage (or a percentage of coverage) for expensive infertility drugs and procedures, while others will completely exclude all infertility benefits. Thus, there is no substitute for a careful policy by policy review of individual benefits prior to beginning any medications or initiating any medical procedures with respect to an assisted reproductive arrangement.

            Insurance policies also vary state to state.  California remains the most progressive state with respect to the legality of assisted reproductive technologies, both in their application as well as the number of cases completed each year. The number of cases has increased dramatically as the technology advances.  As a result, California insurance companies have also been the most aggressive with respect to using surrogacy and egg donation as a reason to exclude coverage.  It is important to remember that without a written exclusion provided to an individual member, the insurance company has no legal basis for excluding coverage. 

            Some generalizations can be made with respect to group versus individual insurance coverage, as well as some unique characteristics to California insurers.  In recent years, California HMO’s were the first to begin issuing written exclusions with respect to surrogacy, egg donation and other infertility treatments.  In general terms, California group insurance policies frequently exclude infertility benefits as California does not mandate infertility coverage.  California is one of the few states to offer a large number of individual insurance policies.  The proliferation of individual policies have been prompted by the needs of a large population of entrepreneurs in California, a population which is strongly on the rise.  Entrepreneurial businesses are frequently sole practitioners or small businesses which will not otherwise qualify for group policies. In addition, individual policies are also secured by members opting out of a particular employers group coverage (i.e., often an HMO) in order to secure more extensive benefits (i.e., paying a small increase to secure a PPO). 

            In states other than California, the opposite situation frequently presents itself. Fewer individual policies are available outside of California, with most coverage extended through HMO’s or other group insurance secured through employment. However, insurers outside of California may not issue exclusions with respect to infertility treatments as readily out of a lack of sophistication or knowledge regarding the complex field of assisted reproductive technologies.  In addition, there are currently fewer infertility specialists and clinics outside of California to otherwise bring large numbers of cases to the attention of insurers. Yet, more and more insurance carriers are using assisted reproductive technologies, as well as their related services and procedures, to provide a basis for exclusions in coverage. Thus, there is simply no substitute for examining individual policies with insurance professionals in order to determine which coverage is best suited for you and your desired treatments.

4.         If your company offers a variety of choices in terms of insurance company coverage, how do you go about finding out which coverage is best for you?

           The best way to determine the coverage that is best for you is to request copies and carefully analyze the “Summary of Benefits” booklets which outline the various types of benefits which are included in specific policies. It is critical to compare and contrast the maternity benefits of individual policies in relation to their respective cost. It is equally critical to determine whether there are any written exclusions or limitations with respect to assisted reproductive technologies.  These exclusions are often found in the “fine print” of your summary booklet or are otherwise hidden among the literature provided to you by the insurer. It may also be important to determine whether desired physicians are covered by your plan, as well as whether that physician has privileges at a hospital appropriate and convenient for you (or your surrogate or egg donor) to complete the desired medical procedures and/or deliver a child born pursuant to the provisions in the policy. You may also want to determine whether hospital care covers neonatal care, and the level of neonatal care provided by that hospital.

            If you are considering working with an egg donor, it is important that not only the egg donor obtain and/or maintain major medical insurance, but that the insurance policy is reviewed to determine whether the unique complications which may result from the aspiration of eggs is specifically covered by the policy. Many insurance policies will NOT cover such expenses, notably hyperstimulation, for egg donors. In such an event, check with your attending physician in order to determine whether special supplemental insurance may be obtained to protect you and your donor from liability and expensive hospital bills in the event she is admitted to the hospital for hormone monitoring after an unforseen hyperstimulation occurs.

          Ultimately, couples must review their own policies to determine what portion of a desired treatment and/or pregnancy might be covered under their policy. In addition, a surrogate and/or egg donor’s insurance must also be examined to evaluate the adequacy of the respective policy. Such policies must be screened prior to beginning any medical procedures or medical treatments, including drug therapy.

5.         What advice can you give about the best way to go about reading and understanding my policy?  If I have questions after reading it, who can I turn to for help and advice?

            There is simply no substitute for completing an extensive “due diligence” prior to the initiation of any medical treatments. Couples are understandably anxious and frustrated when their own attempts to create a pregnancy have been unsuccessful, and frequently overlook important insurance issues in their effort to focus on particular treatments or working with reputable fertility specialists. A careful and complete review of your assisted reproductive arrangement through an objective third-party could save thousands of dollars as well as maintaining “peace of mind” throughout a difficult and emotional process. 

            Utilize the advice of experienced lawyers and agency representatives to assist you in obtaining insurance information. It is important to work with attorneys and agencies who have a clear track record and expertise with assisted reproductive technology arrangements. Such professionals should be capable of advising you with respect to “global” insurance issues and potential pitfalls in addition to reviewing your particular desired policy in detail.  Experienced attorneys should possess repositories of insurance policies and have considerable actual and/or anecdotal experience with the various carriers and HMO’s. At the same time, be wary of relying on professionals too much with respect to insurance issues. While infertility professionals have more experience dealing with insurers, only the individual parties can properly monitor changes in coverage and the timely processing of individual claims for services rendered. Moreover, there are attorneys who specialize solely in the complex field insurance coverage law and should be consulted when difficulties arise.

6.         What is a pre-existing condition and how does that affect insurance coverage for you?

          A pre-existing condition is generally referred to as an illness or injury for which medical advice, diagnosis, care or treatment (including prescribed drugs or medicines) was recommended or received from a physician or practitioner prior to the enrollment date of the insurance policy.  Expenses related to pre-existing conditions are often not covered if they are incurred within approximately one (1) year from the enrollment date of the policy. In some cases, a pre-existing condition limitation may be reduced by “credible coverage” determined to exist under a previous health plan, or by operation of law which prohibits enforcement of a pre-existing condition exclusion. The determination regarding the length of any pre-existing limitation period that applies to you is often calculated within a “reasonable time” (varying policy to policy) following the receipt of accurate and reliable information relating to prior credible coverage.

            A key question in reviewing insurance policies is whether or not the policy determines that pregnancy is deemed a pre-existing condition.  Some policies will exclude pregnancy as a pre-existing condition, while others will not provide maternity benefits if the applying member is already pregnant.  Pre-existing conditions become especially important when a change in coverage or benefits is requested. In most states, it is only possible to change benefits once pregnant through an employment change (i.e., a new employer, if hiring a pregnant woman, cannot deny her maternity benefits for her pregnancy).  Insurers may be reluctant to extend coverage in the event a pre-existing condition is identified in the course of the initial application process, and rarely will expenses related to that exclusion be subsequently covered even if insurance is offered.  Pre-existing conditions such as diabetes may also result in an increased insurance premium.  Thus, it becomes critical to accurately disclose any pre-existing conditions from the outset of the policy to ensure eligibility, while at the same time discerning the particulars of the insurer’s application and payment schedules in order to assure that payments are not wrongfully denied.

7.         If I am advised to consult my Human Resources Department but want to keep private the fact that I am doing infertility treatments, what can I do?

           A Human Resources Department (“HDR”) is a good starting point to obtain general insurance benefit information and request copies of applicable “Summary of Benefits” booklets for specific policies which are available to you.  A HDR representative may also be helpful in analyzing payment plans and unique maternity riders in order to obtain your best possible coverage.  You will need to coordinate benefits, submit applications and discuss your selected policy with an HDR representative in order to secure coverage, but there is no reason to otherwise disclose potential assisted reproductive arrangements with your employers. In fact, it would be prudent to discuss general maternity benefits as opposed to specific treatments.  Your personal medical information is best kept private and confidential as between you and your physician. Once the medical procedures begin, the receipts will be submitted directly to the insurer by the attending physician, allowing for privacy and confidentiality at your place of employment.   Maintaining this level of confidentiality may be helpful for your own emotional well being, allowing you to begin medical procedures and attempt several cycles of treatment beyond the curious eyes of your employer or fellow employees.  Again, there is no reason to disclose the fact that you are involved in infertility treatments to HDR representatives.     

8.         Are there circumstances under which you would be advised not to call your insurance company before beginning a procedure?

           Due to the unique and costly treatments involved in infertility, insurance companies frequently look for a basis to deny benefits in accordance with written exclusions and limitations presented in the “Summary of Benefits” booklet and other information forwarded to you by the insured.  In some cases, insurance claims are denied based on extremely general exclusions in which it is arguable whether the specific treatment would be included in the coverage or not. For instance, some claims are excluded based on “services not specifically listed in the [insurance] Agreement as covered,” or “exclusion for services that are not medically necessary.”

            In order to avoid any possible future claims of insurance fraud, it is critical that you as an insured openly disclose any and all relevant information to your insurer upon request, including the types of desired or necessary treatments.  However, it may not be useful to you to inform your insurer in advance of desired medical procedures and treatment unless pre-approval by the insured is a prerequisite in initiating the treatment.  The effect of early disclosure may result in the claim suddenly falling under one of the more generalized exclusions discussed above in order to provide the insured with a vehicle to deny the claim. A more prudent approach would be to carefully analyze the policy on an anonymous basis prior to initiating treatment, and then subsequently submit the claim to the insured for payment.  To the extent that you conduct any inquiry, it is imperative that you memorialize it in written form and transmit the confirmation to your insurance carrier. Also, keep copies of everything!  Be aware, however, that willful ignorance will not serve as a defense should you become involved in an insurance dispute with your carrier as to the applicability of coverage.

9.         How can I appeal a claim that has been turned down?                                   

            The appeal process for challenging insurance denials will vary from policy to policy. Your first step will be to anonymously contact the customer services department and determine whether there is a formal procedure for appealing the claim. Keep detailed notes and files with respect to the name and telephone number of any and all agency representatives you speak with throughout the appeal process.  Many insurance companies offer formalized “grievance reviews” including an invitation for a grievance committee hearing in order to urge the insured to reverse its decision.  Such reviews are regulated by specific time periods which must be strictly adhered to which apply to both the insured and the insurer. For instance, a grievance committee must generally provide a written notice to the member challenging a claim within 15 days of receipt of the grievance to inform the insured of the method the committee will use to analyze the denial.

            The most important step in initiating your challenge is to force the insurance company to memorialize the denial in writing.  A written denial of a claim should include a complete explanation of the reason the insured is denying the claim. Without a written denial, you nor any professional will be able to properly analyze whether or not the denial is valid.   For example, most hospitals will require pre-approval of insurance prior to admitting a patient into a maternity ward.  Surrogate mothers are sometimes informed at the time of their pre-admission interview at  the hospital that the insurance company has verbally denied their insurance for the pregnancy.  In such cases, it is critical to remain calm and demand a written denial from the insured. In many cases, pressing the insurer in this way will force the company to focus on the written exclusions and limitations sections of your specific policy.  Insurers may then be averse to expose themselves to liability for the issuance of a wrongful exclusion if there is no basis for the denial in your  particular policy.

In the event that the appeal is denied after your efforts to challenge the exclusion have failed, contact agency representatives and an experienced insurance litigator if you wish to utilize the legal process to further challenge the denial. The success of your claim may depend on whether or not the insurer has relied on a general or specific exclusion in the policy. In recent years, insurance litigators have begun to analyze insurance denials for infertility treatments and the claims of surrogate mothers and egg donors under constitutional principles of equal protection and discrimination. It is possible that your denial may fall within a series of denials currently being investigated for purposes of a class action against your individual insured. Legislators have been reluctant to pass statutes related to infertility due to the rapid growth of technology in this area and issues of personal privacy and confidentiality. At the same time, insurers are increasingly under legislative scrutiny for the issuance of denials related to women’s health, especially in the context of HMO coverage.  It may further be helpful to contact the office of your state Insurance Commissioner and/or state Department of Insurance to investigate the procedures for lodging a formal complaint against your particular insurance carrier or filing a petition to initiate the investigation of your particular denial via state statutes.  Finally, in the event your denial is upheld after all formalized appeal procedures are exhausted, contact experienced professionals and insurance litigators to determine whether your claim is ripe for legal review.

10.       Even though I believed that a certain procedure was not covered, I submitted the claim anyway in the hope that some part of it would be covered.  To my delight, the insurance company paid most of it.  Now I am worried they will figure out that they should not have paid for it and will ask me for the money.  Can they demand that I repay money for a procedure they were not required to cover?

           The laws with respect to the payment of insurance claims vary from state to state based on specific insurance codes.   First, it is important that an insured never provide information to an insurer that is misleading in any manner. If it is determined that the claim was paid based on misleading information provided by the insured, the insurance company will have a valid claim to seek reimbursement from the claimant to offset the amount wrongfully paid. Applicable state statues of limitations will govern the time period the insurance company has to seek this method reimbursement.

            In the event the insured has justly submitted the claim with the expectation that the treatment or therapy will be covered under applicable insurance benefits, and the insured subsequently reasonably relies on the payment and/or assurances made by the insurer, then the insurance company will likely be prevented from seeking an offset or reimbursement in the event the insurer later determines that the payment should not have been made.  These equitable principles should protect an insured from an insurance company wrongfully seeking repayment after many months or years in the event expensive treatments were covered by the insured. 

11.       My husband and I work for different companies but each company provides us with the same insurance carrier.  How do we coordinate benefits?  If I have reached my lifetime cap through the policy I hold with my company, do I get to start again with the policy from my husband’s policy?

           Most insurance policies provide for annual deductible amounts both for individuals and families, as well as maximum “out-of-pocket” limitations and lifetime caps. With respect to maternity and/or infertility benefits, it may be possible to reach the maximum allowance for an individual covered under the policy but still seek reimbursement under applicable “family” expense allowances. Due to this important distinction, it may be prudent to begin insurance submissions for a female member’s drug therapies or other individual treatments to her own policy while submitting claims for benefits which affect the family and/or couple (i.e., such as costs associated with in vitro fertilization, if covered under the specific policy) under the spouse’s policy in order to balance the amounts submitted.   In the above-stated scenario, where the female member’s lifetime cap has been met, it may only be possible to seek reimbursement under the spouse’s insurance for specific infertility treatments that otherwise directly affect and involve his treatment as well. This will be especially true where the family and/or couple maintain coverage with the same insurer due to the likelihood that insured will have easy access to all claims previously submitted to that individual insurance company.     

12.       Can I purchase my own policy that will cover infertility?

           Unfortunately, insurers are not currently offering supplemental coverage to provide benefits for most infertility services and/or treatments. Hopefully in future years a policy will emerge from a progressive insurance company, likely at a high premium, to cover the cost of infertility and/or surrogacy related costs. Until then, the most prudent way to obtain the maximum benefit at the most efficient cost is simply to examine your own individual policy with respect to maternity benefits.  Review in detail the type and extent of maternity coverage provided, including their related exclusions and limitations as outlined in the “Summary of Benefits” booklet and additional documentation from the insurer.  It may also be helpful to call an insurance broker to identify smaller companies which may not otherwise be familiar to you in order to determine if there is a policy with greater coverage which you may have overlooked.  Discuss your findings with an experienced attorney and agency representative in order to determine whether a change in coverage would provide you with increased benefits. Only after this detailed process is completed should any treatments or drug therapies begin.

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This page was last modified 06/02/03