Sued for back-premium


New Member
My health insurance company is threatening to sue me for $20,000 in back premiums because they contend that I have of been claiming Connecticut residency instead of New York. The rate in Connecticut for an individual plan is around one sixth the cost for the same coverage in New York. I have never filed a claim with this company and they have been aware that I rented an apartment in New York as well as living in my parents home in Connecticut, but continued to charge me the Connecticut rate after I explained my situation to them three years ago and faxed them a copy of my Connecticut drivers license. But recently they have begun to charge me the New York rate, and are requesting that I pay the difference in premiums over the time I've had the policy, which totals around $20,000!

Does anyone know if these types of lawsuits are common and if it is legal for an insurance company to charge back premiums? I am scared and obviously in need of a lawyer.
With NY as your state of residence on a tax return I would say you have no case. You can pay up or allow the carrier to retroactively cancel your coverage for misrepresentation and sue to recover any claims they have paid on your behalf.
I have at least 5 policies on the books with almost identical situations and each time I ran it past the insurance company before the app was submitted.

One was a duel residency situation where the client was self-employed, travelled extensively and lived both in NY and MD pretty much evenly split half the year. He owed homes and can proove ownership in both states. In this case Golden Rule gave me the green light to give him MD rates and assured me he can use his coverage through the United Healthcare network while in NY.

The other was an Assurant case and again, same thing with duel residency in NY and another state. Assurant said as long as they could proove that they have an address in MD and actually reside in the state part of the year they can get MD rates and use the PHCS network with both states. Haven't run into a snag yet with either situations.

You will most likely have to proove that you actually resided in CT part of the year and it was disclosed to the insurance company while filling out the application. I noted all of my applications with that information before they went into underwriting. Insurance companies don't like surprises.

It doesn't matter at all where you file your taxes. I can live in MD right on the PA line and work in PA. I'm still a MD resident and need to use that state for insurance purposes. Residency for insurace purposes is where you physically walk in the door at night when your day is over.
In battles involving residency, income tax records are often the determining factor.

In this case the carrier has determined his place of residency is something other than what was listed on the application. How they would know that if he truly has "never filed a claim" is open for speculation.

If the carrier is threatening legal action, something is amiss that is not revealed here.
Perhaps I should clarify. They have sent me a letter from their investigations department requesting that I pay approx $20,000 in back premium, and although the legal system has been mentioned in letters and phone conversations I've had with them, they have not moved forward with any sort of legal action at this point. Back in '03 they questioned my residence and I faxed them a copy of my CT drivers license. Shortly thereafter they sent me a letter confirming my CT residency and have continued to to charge me the CT rate until very recently. Can they really turn around and charge me back-premium? And if I don't pay this money, are they likely to sue or send it to a collection agency? If my tax status is so important, then why was it never mentioned in my policy or back in '03 when they first questioned my residence? It seems to me that they are trying to charge me for their mistake.
They can sue for back premiums. They can retroactively cancel coverage. They can do nothing.

Should you fight the case your residency as defined on your tax records most likely would be the deciding factor.

If you declared on your application that your residence status was CT when in fact it is NY then it is not their mistake but yours.
Your drivers license doesn't solve a duel residency issue. If you do indeed reside in both states you would have needed explicit permission from the insurance company to charge you CT rates.

They must have some kind of proof or reason for charging you the NY rates so you'd better figure out what info the insurance company has before proceeding.
You need a lawyer "When you are notified by the courts your being sued".

They are talking to you to see if you hang yourself is my guess.

I suggest discontinuing communications.

Get coverage elsewhere .