Health Net Redux

[somarco]

FWIW, I have been doing some more research on the Health Net lawsuit ($9M) and found the arbitrators opinion.

My co-blogger has made contact with an insider at Health Net who is to call tomorrow and answer some questions.

Based on the ruling (above) it looks like the agent screwed up big time. Health Net informs us that agent is no longer representing them.

No big surprise there.

I am quite interested in getting as much as I can from Health Net on why they took the action (although I have my suspisions).

I expect to post a follow up on our blog in the next few days if anyone is interested.

Here is the first one. Sequel to follow.

 

[TXINSURANCE]

Funny how the applicant FORGOT to disclose she went to the ER a week and a half prior for CHEST PAIN.

So who was committing fraud?

 

[Dave020]

As I said in another thread, the Agent is the way out for the client. That is why I will never, ever fill out the application for anyone. I know others disagree, but I think the point is made very nicely in that piece.

And the arbitrator used that against Health Net for not having the client re-do the application since it was obviously filled out by the agent.

Sounds like the fact that he is no longer contracted with HNet is no big deal to him (he is a life guy apparently).

 

[TXINSURANCE]

This should also be a lesson to all brokers that when the $##@! hits the fan the carrier will not back you up. Corporate America will chew you up and spit you out.

Too many brokers think their personal friendships or history with carrier means something - and it does not.

They will turn on you in a heart beat.

 

[J.R.]

Here's what I don't understand. Both parties have to sign the application and date it + the client has a 10 free look period.

So how the hell should the agent be held responsible?

Joe brought up an interesting fact that crossed my mind. Who in their right mind forgets about a potentially fatal visit to the ER.

 

[somarco]

JR -

The agent was a representative of the carrier and instituted the change. They were a party to the transaction, therefore they share in the liability. The agent also had a faulty memory when it came to finding out if he actually ASKED all the questions or simply said, "you're in good health, right?".

Dave -

The arbiter seemed more focused on the bounty paid to H N employees for recissions. In a way, I can't blame him. In all the years I have been in the business, I have never heard of such.

Even if the agent had not completed the application he still would have been culpable since he was a party in interest. There is also the fact that the agent solicited the applicant and instigated the change.

Overall, there is enough blame to go around. The applicant failed to disclose and filed a fraudulent app.

The agent was negligent in numerous ways.

The carrier failed to utilize due diligence in underwriting the application.

 

[Crabcake Johnny]

Clients will listen to agents. Let's use this as a scenario you tell me if the client's even partially at fault:

Agent is 30 days behind on the car payment, trucks on the way. He sits with his next client who says they went to the ER with chest pains two weeks ago.

The agent says "well since you got released from the ER and weren't hospitalized it doesn't need to go on the application. We only have to note times when you were admitted."

Client says "Oh, ok" and the is washed.

Is the client at fault?

 

[Dave020]

JR -

Dave -

The arbiter seemed more focused on the bounty paid to H N employees for recissions. In a way, I can't blame him. In all the years I have been in the business, I have never heard of such.

Even if the agent had not completed the application he still would have been culpable since he was a party in interest. There is also the fact that the agent solicited the applicant and instigated the change.

Overall, there is enough blame to go around. The applicant failed to disclose and filed a fraudulent app.

The agent was negligent in numerous ways.

The carrier failed to utilize due diligence in underwriting the application.

I agree, I think that tying bonuses to the number of recissions is just asking for these kinds of problems.

 

[Crabcake Johnny]

Applications can be made easier and key questions can be large an in bold:

Warning: Failure to answer these questions honestly could result in the cancellation of your policy.

In the last 7 years have you ever been hospitalized ___ yes ___ no

In the last 7 years have you ever went to the ER ___ yes ___ no

 

[GreenSky]

In the last 7 years have you ever went to the ER ___ yes ___ no

I'm sure the insurance company might want to put that into correct English! Maybe "have you ever used (or been to, or gone to) the the ER?"

Wait. Is this this the "fight" thread?

Rick