Insurance Question...is This Considered Fraud?

[sunny8184]

I live in NJ and did not have health insurance. So I decided to get Individual health insurance. Applied 20 days ago. Form had the question "Are you or your spouse pregnant" Answer was NO.
Got insurance card yesterday and insurance coverage started yesterday. Today my wife told me she is pregnant. yay!!! Based on exclusion conditions (1-year) in insurance documents I think this pregnancy won't be covered since it technically started before insurance. and thats fine.
But will the insurance company consider this as fraud and cancell the insurance? I did not know this when I filled the form 20 days ago.
Do I need to call them and explain the situation? Or just pay the doctor and not claim/report insurance company?

 

[Ann H]

First of all, congratulations on the upcoming addition to your family.

Important question - When did YOUR WIFE realize that she was pregnant? Since you applied for coverage for both of you, she probably had to sign the application likewise. If you completed the application, then had her add her signature, then she may not realize that a question asked if she was pregnant.

Next important question - what other coverage do you have? For instance, were you going to cancel a policy when this new one became effective? Keep that back-door option open until you've resolved this issue.

The insurance company will most likely contest this if there is a claim. Some insurance companies ask when your wife was DIAGNOSED as pregnant (in other words if she did a home pregnancy test, but she didn't go to the doctor for confirmation yet, it's not a diagnosis). Other insurance companies ask if there were symptoms or other indications of a pre-existing condition (such as pregnancy). Symptoms or indications would include a home pregnancy test as well as missed periods or other indications. Many times this is called the "prudent man rule" (well, or prudent woman rule!). If a normally prudent person WOULD HAVE sought medical care for a condition, because of symptoms or other indications of a medical condition, then it is assumed that the person knew the condition existed.

All of these are important points. Read the application over thoroughly and see how the question was asked. Then, contact your agent/broker and explain the situation thoroughly and honestly to him. Hopefully, you have an agent/broker. If you don't, then type into this forum the exact wording from the application where the pregnancy question was asked. Also type in the exact wording of the pre-existing condition clause. And... be aware that another issue is that many insurance companies require disclosure of any condition that manifests itself AFTER the application was signed, but BEFORE the insurance was effective. If you have anything in writing about that clause, then type it into the forum, too. This will help us guide you, and hopefull there is a NJ agent on site that can help with NJ state laws.

Don't just assume you can continue the insurance without filing a claim. If your wife had complications of pregnancy a claim would likely be filed. Also, since state laws allow the baby to be covered from moment of birth, the insurance company would be on the risk for any conditions that the baby might have. This is far to important to just kick under the rug. Talk this over honestly with your agent/broker.

 

[aheff]

Let me first say to Ann- wow. What a thorough and great answer. To the original poster, I'll simply confirm what Ann said.
Did your wife know she was pregnant at the time of application?
If you have another option, such as COBRA, you may very well want to go that route. Lastly, I would want to take care of this issue NOW- write the carrier, tell them exactly went down, and get their response in writing. I realize it is significantly more expensive, but it is a heck of a lot less than a $20,000 hospital bill denied by a insurance company claiming you did not disclose.

 

[xrac]

Ann, you answered that like a true pro! Thank you!

 

[Mark]

WOW Ann, Great Job!

 

[dgoldenz]

This will help us guide you, and hopefull there is a NJ agent on site that can help with NJ state laws

NJ is a guaranteed-issue state....don't think you'll find too many NJ agents around here, if they even exist.

 

[GoCubsGo]

WOW Ann, Great Job!

DITTO. We should all be like Ann..

 

[STIBROKER]

Nice to check a thread with a insightful and helpful post......

 

[Ann H]

Friends! You have made my Friday by such supportive compliments. Thank-you.

NJ is a guaranteed-issue state....don't think you'll find too many NJ agents around here, if they even exist.

Since dgoldenz has reminded me that NJ is a guaranteed-issue state, let me alter what I said to the original poster. "Guaranteed-issue" means that the insurance company must guarantee that they will issue a policy to you, no matter what the pre-existing condition is. That means that the stress is relieved quite a bit in your case! Like dgoldenz said, you likely don't have an agent. If you do, contact him. If you don't, contact the insurance company and tell them honestly what happened. Let us know the outcome, and we can help you if the answer you get doesn't seem like it's accurate or complete.

When you find someone at the insurance company that can answer your question completely and accurately, get that person's name and extension number, and ask them to make a note in their computer system documenting your phone call. Ask them to put it in writing to you. If they don't do that, document all of it in writing, and mail or fax it to the insurance company as confirmation of the phone call. At that point, it would be clear in a legal setting that you made full disclosure and did everything prudent to correct the situation. You will probably be okay. Then, relax, and have fun shopping for cribs and strollers!

Happy Friday.
- - - - - - - - - - - - - - - - - -

Today my wife told me she is pregnant. yay!!!

Congratulations.

 

[djs]

Disclaimer: I don't know New Jersey rules, whether guaranteed issue automatically means preexisting is covered or not, or if there is a delay. I also don't know if all plans are guaranteed issue.

Be careful of just calling an insurance company and asking whether there is a problem with the policy because your wife is pregnant. They will probably tell you yes. You need to ask them what the rules are and figure out how they apply to you. The exact wording of the question on the application is important. 20 days ago, it sounds likely that your wife did not know, or have reason to suspect she was pregnant, which would mean that there is likely no issue.

On the other hand, if she was simply waiting for the insurance to become active, then you might have an issue.

Dan