What happens if you didn't tell the Insurance Company about a condition or disease that you knew or should have KNOWN about?
That is, what if there is wrong, false, misleading or incomplete information on your application?
The Insurance company can cancel the policy, give back the premium - force the agent/broker to give back the commission or service fees, even if the condition has NOTHING to do with the claim that arises.
This in fact happened to us back in the early 80's, the start of the AIDS epidemic. We had someone who was in a bar fight in Haiti, got stabbed and was given multiple blood transfusions. His policy was cancelled, when he turned in a claim for some kind of stomach hospitalization.
FAQ's
Is there a ONE page simple form to find out if an Insurance Company will write me, without doing a full application?
What if I have a (Pre-Existing)condition, but the application does not ask about it?
What is Medical Underwriting? Why don't Insurance Companies write coverage for anyone willing to pay the premium?
What if my Agent says it's OK, not to list a condition?
What does to the best of my knowledge mean?
Can the Insurance Company cancel my coverage, even if the claim had NOTHING to do with the pre-existing condition that was not listed on the application?
Where can I get more MEDICAL information on my health conditions and how to keep them under control?
What if the Insurance Company cancels me in Bad Faith? Do I have a right to appeal?
What does it mean if the Insurance Company says I concealed a Material Fact?
What does the California Insurance Code §330 - 339 require an applicant to tell the Insurance Company?
Does the site have further links that I can review?
Where can I get coverage, if no Insurance Company wants me?
Consumer Links
See FAQ's Above
US Military Enlistment Disclosures
 
              
Answers to FAQ's
What Information did the application ask for?
6A. Health History Questionnaire – ALL QUESTIONS MUST BE ANSWERED OR THE APPLICATION WILL BE RETURNED. Give COMPLETE details of any "Yes" answers in Section 6C on the following page.
Has any person listed on this application, in the last 10 years, had any signs or symptoms, seen a health care provider, had treatment recommended including prescription medications, received treatment, or been hospitalized for any of the following conditions as stated in questions 1 through 14?
(Blue Cross Individual Application.)
I have provided a complete history of material information that will be considered in the acceptance or denial of this application. I understand that if I intentionally provided incomplete or false material information Blue Cross may revoke my coverage. This means Blue Cross will cancel membership as if it never existed. Also, after approval for membership, if material information is discovered by Blue Cross that was not provided to the Plan prior to the effective date of the policy, Blue Cross may deny coverage.
I understand and agree that I alone am responsible for the accuracy and completeness of this application.
I have personally read and completed this application. If I am accepted, this application will become part of the contract between Blue Cross and me.
(Blue Cross Individual Application)
How does the Insurance Company know, if the application wasn't filled out correctly?
Here's where they write to your MD, before a claim is even turned in.
Blue Cross settlement proposal to only cancel if the error was intentional
(5/11/2007
LA Times 2/23/2008 $9 million award
more
Calif Health Line
Anderson Cooper Newscast
$15 Million Settlement on CA DOI Website) la times.com
Attestation
Your Insurance Agent/Broker MUST sign this form, that he informed you of the importance of completing the application properly. The agent can get in a lot of trouble for improperly advising you on how to complete the application.
6.
Review and select one of the following:
I did not assist the applicant in any way in completing or submitting this application. All information was completed by the applicant with no assistance or advice of any kind from me.
I assisted the applicant in submitting this application. All information in the health questionnaire was provided by them. I advised the applicant that they should answer all questions completely and truthfully and that no information requested on the application should be withheld. I explained that, if information is withheld, that could result in their coverage being cancelled later. The applicant indicated to me that they understood these instructions and warnings. To the best of my knowledge, the information on the application is complete and accurate. I understand that, if any portion of this statement by me is false, I may be subject to civil penalties of up to $10,000.
(Blue Shield Individual Application, Insurance Code 10119.3)
10119.3. (a) Notwithstanding any other provision of law, an agent
or broker who assists an applicant in submitting an application to a
health insurer has the duty to assist the applicant in providing
answers to health questions accurately and completely.
(b) An agent or broker who assists an applicant in submitting an
application to a health insurer shall attest on the written
application to both of the following:
(1) That to the best of his or her knowledge, the information on
the application is complete and accurate.
(2) That he or she explained to the applicant, in
easy-to-understand language, the risk to the applicant of providing
inaccurate information and that the applicant understood the
explanation.
(c) If, in an attestation required by subdivision (b), a declarant
willfully states as true any material fact he or she knows to be
false, that person shall, in addition to any applicable penalties or
remedies available under current law, be subject to a civil penalty
of up to ten thousand dollars ($10,000). Any public prosecutor may
bring a civil action to impose that civil penalty. These penalties
shall be paid to the Insurance Fund.
(d) A health insurance application shall include a statement
advising declarants of the civil penalty authorized under this
section.
"to the best of my knowledge"
Definition: 1. information in mind: general awareness or possession of information, facts, ideas, truths, or principles -- Her knowledge and interests are extensive. 2. specific information: clear awareness or explicit information, e.g. of a situation or fact ---I believe they have knowledge of the circumstances.
Encarta
To render life policy void for falsity of warranty that answers in application therefor are true to best of applicant's knowledge and belief, they must be substantially untrue, not merely in fact, but to best of applicant's knowledge and belief.
St.1917, p. 964, 6 (West's Ann. Insurance Code, 10380);
West's Ann.Civ.Code, ? 1572.
Combs v. Burbank Mut. Life & Benefit Ass'n 140 Cal.App. 139, 35 P.2d 132 (Cal.App. 2 Dist. 1934)
Applicant's failure to disclose diagnosis of leukemia and thereby correct misstatements in application for life insurance policy breached continuing duty of good faith and provided basis for rescission under statute requiring each party to contract of insurance to communicate to the other, in good faith, all facts within knowledge which are or are believed to be material to contract, as to which no warranty is made, and which cannot be ascertained by other party, even if insurer could have discovered disease by complete blood count (CBC) during application process. CA Ins.Code 332 .Lunardi v. Great-West Life Assurance Co. 37 Cal.App.4th 807, 44 Cal.Rptr.2d 56 (Cal.App. 6 Dist.,1995)
Rescission of Membership
Rescission of Membership
Every applicant age 18 or older acknowledges the following:
I have provided true and complete answers to all questions in the application to the best of my knowledge and understand that all answers are important and will be considered in the acceptance or denial of this application.
I understand that all information I know, that is responsive to a question on this application, must be provided in my answers consistent with California law. If Anthem Blue Cross and/or Anthem Blue Cross Life and Health Insurance Company discovers that you committed an act, practice, or omission that constitutes fraud, or intentional misrepresentation of material fact is found in this application, Anthem Blue Cross and/or Anthem Blue Cross Life and Health Insurance Company may rescind my plan/policy within the first 24 months from my effective date.
I understand this means that Anthem Blue Cross and/or Anthem Blue Cross Life and Health Insurance Company will revoke my plan/policy as if it never existed back to the original Effective Date. Rescission may occur even if we review your medical records or seek medical confirmation of your health information as part of our processing of your application.
The primary applicant additionally acknowledges the following:
All of my dependents listed on this application who are 18 years of age or older have read this application and have provided complete and accurate information for this application to the best of my knowledge and have signed the application below.
Also, to the best of my knowledge and belief, I have done everything necessary to be able to assure you that all information about all applicants, including my children under the age of 18, listed on this application is true and complete. Anthem Blue Cross and/or Anthem Blue Cross Life and Health Insurance Company may deny or rescind the entire plan/policy if it discovers that you committed an act, practice, or omission that constitutes fraud, or intentional misrepresentation of material fact is found in this application. Enrollees/insureds other than the individual(s) whose information led to the rescission on such plans/policies may be able to obtain coverage as set forth in the section
Eligibility following Rescission.
I understand that if my plan/policy is rescinded, I will be sent written notice that will explain the basis for the decision and my appeal rights.
I have the option to submit a new application in the future to be underwritten and considered for benefits.
I also understand that, consistent with California law, I will be required to pay for any services Anthem Blue Cross and/or Anthem Blue Cross Life and Health Insurance Company paid on my behalf and that Anthem Blue Cross and/or Anthem Blue Cross Life and Health Insurance Company will refund any premium paid by me, less my medical expenses that Anthem Blue Cross and/or Anthem Blue Cross Life and Health Insurance Company
(Blue Cross Application Section 7)
Q7: The Affordable Care Act (through Public Health Service Act section 2712) generally provides that plans and issuers must not rescind coverage unless there is fraud or an individual makes an intentional misrepresentation of material fact.
A rescission is defined as it is commonly understood under the law – a cancellation or discontinuance of coverage that has a retroactive effect, except to the extent attributable to a failure to pay timely premiums towards coverage.
Is the exception to the statutory ban on rescission limited to fraudulent or intentional misrepresentations about prior medical history?
What about retroactive terminations of coverage in the “normal course of business”?
The statutory prohibition related to rescissions is not limited to rescissions based on fraudulent or intentional misrepresentations about prior medical history.
An example in the Departments’ interim final regulations on rescissions clarifies that some plan errors (such as mistakenly covering a part-time employee and providing coverage upon which the employee relies for some time) may be cancelled prospectively once identified, but not retroactively rescinded unless there was some fraud or intentional misrepresentation by the employee.
On the other hand, some plans and issuers have commented that some employers’ human resource departments may reconcile lists of eligible individuals with their plan or issuer via data feed only once per month. If a plan covers only active employees (subject to the COBRA continuation coverage provisions) and an employee pays no premiums for coverage after termination of employment, the Departments do not consider the retroactive elimination of coverage back to the date of termination of employment, due to delay in administrative record-keeping, to be a rescission.
Similarly, if a plan does not cover ex-spouses (subject to the COBRA continuation coverage provisions) and the plan is not notified of a divorce and the full COBRA premium is not paid by the employee or ex-spouse for coverage, the Departments do not consider a plan’s termination of coverage retroactive to the divorce to be a rescission of coverage. (Of course, in such situations COBRA may require coverage to be offered for up to 36 months if the COBRA applicable premium is paid by the qualified beneficiary.)
(dol.gov )
Recession in CA - IRMI.com
Blue Cross FAQ's concerning Obama's Plan
Post Claim Underwriting The Federation.org
Recent news articles Calif. Healthline
Retroactive Action
Blue Cross has 24 months to initiate retroactive action due to false or omitted health history information on the application. Claims submitted during that period are audited to ensure that preexisting conditions not listed on the application were not diagnosed, evaluated, or treated prior to enrollment. If a preexisting condition that should have been disclosed is discovered, the contract may be retroactively canceled, or it may be re-underwritten and placed into coverage that would have been offered based upon complete original information.Source - Blue Cross Confidential Agent's Manual
Employers and employees who commit fraud or misrepresentation to circumvent the law or rules governing PacAdvantage will be disqualified, possibly retroactive to the initial enrollment date. In cases of fraud, individuals may be financially responsible for their own medical care, even care provided while improperly enrolled through PacAdvantage. Page 6 Pac Advantage Employer Manual 7/04
AB 1945 - California Proposed Law to Prohibit Post Claims Underwriting
More up to date info leginfo.ca.gov then key in AB 1945
Limitations on Recission
Insurance Companies are getting more & more limited if they want to cancel coverage. Policy holders, who had coverage improperly cancelled have the right to get their policy back. Agents and brokers attest that they explained the importance of filling out an application correctly.
(AB 2569 (2008)
1389.7 and 1389.8 Health and Safety Code,
10119.2 and 10119.3 Insurance Code.)
lawsuits pending to limit insurer ability to cancel
Existing law prohibits a plan or insurer from rescinding, canceling, or limiting a health plan contract or health insurance policy due to the plan's or insurer's failure to complete medical underwriting and resolve all reasonable questions arising from written information on or with an application before issuing a contract or policy
(Legislative digest of AB 2569
medical news today.com)
Insurance Companies can no longer cancel for minor or unintentional mistakes in a member's application. Consumers may sue insurers over policy rescissions. The cancellation must give 30 days notice and advise members of their right to appeal
(AB 2470An act to amend Sections 1365, 1367.01, 1367.15, 1368, 1389.21, and 1389.3 of, and to repeal Sections 1357.11, 1357.53, and 1357.54 of, the Health and Safety Code, and to amend Sections 10123.135, 10273.4, 10273.6, 10384.17, and 10713 of, and to add Section 10273.7 to, the Insurance Code, relating to health care coverage. )
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