Tag: West Virginia

Clearing a High Health Insurance Hurdle: the Pre-Existing Condition Insurance Plan (PCIP) Program

There is a new option for those who are uninsured because of a pre-existing condition—the Pre-Existing Condition Insurance Plan (PCIP) program. Created by the Patient Protection and Affordable Care Act (the health reform law), the PCIP is designed to make health coverage available to those with pre-existing conditions. Importantly, the PCIP does not cost enrollees more just because of their medical condition.

The U.S. Department of Health and Human Services runs the PCIP program in twenty-three states and is contracting with a national insurance plan to administer the program. These states are: Arizona, Alabama, Delaware, Florida, Georgia, Hawaii, Idaho, Indiana, Kentucky, Louisiana, Massachusetts, Minnesota, Mississippi, Nevada, Nebraska, North Dakota, South Carolina, Tennessee, Texas, Vermont, Virginia, West Virginia, Wyoming, as well as the District of Columbia.

The remaining states are running their own pre-existing condition insurance plan programs. As a result, application procedures, costs and benefits for these state-run programs may differ not only from the federally-run PCIP, but also from other states.

Under the federally-run PCIP program, a broad range of health benefits are covered, including primary and specialty care, hospital care and prescription drugs. Benefits provided by these PCIPs are available even if they are used to treat a pre-existing condition.

To qualify for coverage under the PCIP program, a person:

  • Must be a United States citizen or legal resident;
  • Must have been without health coverage for at least the previous six months; and
  • Must have a pre-existing condition or have been denied coverage because of health a condition.

The PCIP program offers three plan options:

  • The Standard Plan;
  • The Extended Plan; and
  • The HSA Plan.

Each plan has its own premiums, calendar year deductibles, prescription deductibles, and co-payment requirements. However, all three plans pay for preventive care at 100%, with no deductible when a preventive diagnosis is indicated by an in-network doctor. Preventive care includes annual physicals, flu shots, routine mammograms, and cancer screenings. For non-preventive care, insureds staying in-network will pay 20% of their medical costs after satisfying the deductible.

Despite being a federally-run program, PCIP premiums may vary by state. For example, premiums are higher in Texas than they are in Florida.

In Florida, the monthly premiums for people 18 years old or younger are $118 for the Standard Option, $158 for the Extended Option, and $122 for the HSA Option. In Texas, the premiums are $133 for the Standard Option, $179 for the Extended Option, and $138 for the HSA Option. Similarly, those living in Florida ages 35 to 44 years old will pay $211 for the Standard Option, $284 for the Extended Option, and $220 for the HSA Option. In Texas, the monthly premiums are $239 for the Standard Option, $323 for the Extended Option, and $248 for the HSA Option.

Under this program, the first premium payment is due within 30 calendar days from the date an approval letter is received; otherwise the application will be cancelled. The effective date of coverage depends on the date the application and all supporting documents are received by the PCIP. If the documentation is received on or before the 15th of the month, coverage will be effective on the first day of the next month. If documentation is received after the 15th of the month, coverage will be effective on the first day of the second month.

If an application for coverage under the PCIP is denied, the applicant will receive a letter explaining the reasons for such denial. These applicants have 45 days to file an appeal of their denial, if they so desire. Otherwise, they are free to re-apply for PCIP coverage upon meeting the eligibility requirements.

The PCIP program is only available until 2014. This is because in 2014, insurance companies will be prohibited from refusing to sell coverage or renew policies because of a person’s pre-existing condition. Additionally, in 2014, individuals whose employers don’t offer them insurance will be able to buy insurance directly in a health insurance exchange.

For those who have been unable to get health insurance due to a pre-existing condition, the PCIP program may be the solution they have been looking for. However, given the disagreement and uncertainty surrounding health care reform, even after the Supreme Court upheld nearly every provision of the law, only time and experience will tell if the PCIP program is in fact what it was designed to be.

At Setnor Byer Insurance & Risk, we are committed to guiding you through the rapidly changing health care landscape. Be sure to check back with us periodically for future informational updates. In the meantime, if you have specific questions about health care reform or if you are ready to take action and would like to see how Setnor Byer Insurance & Risk can help, contact us.

The “Intentional Act” Exclusion: A Chink in the Armor of Workers” Compensation Statutes

In addition to increased productivity, the Industrial Revolution brought with it the unwanted consequence of increased workplace injuries. The explosive growth in industry made the workplace increasingly dangerous, and the frequency and severity of workplace injuries soared. As the number of injured workers increased, so too did the number of lawsuits against employers. The result was an inefficient, time-consuming, and costly judicial process that did little to address the problems encountered by employers and their injured employees.

The State of Washington echoed these sentiments in its workers’ compensation statutes by noting that “the common law system governing the remedy of workers against employers for injuries received in employment is inconsistent with modern industrial conditions. In practice, it proves to be economically unwise and unfair…The remedy of the worker has been uncertain, slow and inadequate. Injuries in such works, formerly occasional, have become frequent and inevitable.”

In response to a judicial system that no longer met the needs of those it sought to serve, states began enacting workers’ compensation laws in the early 1900s. The dual goals of providing for injured employees and of reducing employer/employee litigation served as the foundation for many of today’s workers’ compensation statutes.

States achieved these goals by opting for a legislatively mandated allocation of risk that employed a two-pronged approach: compelling employers to provide for injured employees outside of the traditional tort system, and prohibiting injured employees from suing their employers for workplace injuries. Employers and employees were forced to accept this statutory compromise known as the “compensation bargain,” an arrangement based on a mutual renunciation of common law rights and defenses by employers and employees alike.

On one hand, employees enjoy the benefit of what is essentially a no-fault workers’ compensation system that offers prompt medical attention and benefits regardless of any fault on the part of the employee. Consequently, employers are prohibited from asserting any defenses against the injured employee seeking compensation, effectively making employers strictly liable for injuries suffered by their employees.

However, in exchange for providing this no-fault insurance, employers benefit from the statutory removal of injury-based employer/employee lawsuits from the common law tort system. An example of this is illustrated in West Virginia’s workers’ compensation statute, which provides that the “enactment of… the workers’ compensation system in this chapter was and is intended to remove from the common law tort system all disputes between or among employers and employees regarding the compensation to be received for injury or death to an employee… .”

Such a provision theoretically protects an employer from being sued by an injured employee who claims, for example, that the employer’s negligence caused the workplace injury. Recall that under the compensation bargain, the injured employee relinquishes the right to sue for potentially greater, although uncertain, damages via a common law negligence claim in exchange for the right to automatic and prompt workers’ compensation benefits.

The chosen method for removing employee injury claims from the common law was by granting employers immunity from any such lawsuits or, alternatively, by mandating that the benefits provided under a state’s workers’ compensation laws are the exclusive remedy available to an injured employee. Regardless of which method is chosen, the substance and effect are the same, and the benefits of taking such cases out of the traditional common law tort system are realized.

In describing these benefits, one state’s supreme court noted that “in return for accepting vicarious liability for all work-related injuries regardless of fault, and surrendering his traditional defenses and superior resources for litigation, the employer is allowed to treat compensation as a routine cost of doing business which can be budgeted for without fear of any substantial adverse tort judgments. Similarly, the employee trades his tort remedies for a system of compensation without contest, thus sparing him the cost, delay, and uncertainty of a claim in litigation.”

Compliance with the letter and spirit of the compensation bargain is essential to maintaining the benefits both parties enjoy. Many states, recognizing the importance of maintaining this balance, have withdrawn any immunity an employer may have been entitled to if the employer fails to obtain the necessary workers’ compensation coverage, thus freeing the injured employee from his or her obligation to abstain from suing the employer under a traditional common law theory.

However, despite the compensation bargain, injured employees, or their personal representatives in cases involving the employee’s death, have routinely tried to sue their employers by claiming that the employee’s injury or death was the result of an intentional act. If an employee’s cause of action succeeds, then his or her employer will generally lose the immunity it enjoys under the workers’ compensation laws.

This loss of immunity is consistent with the general policy against allowing an individual to insure against the consequences flowing from an intentional act. The concern is that if an individual were permitted to insure against a loss brought about by an intentional act, then there would be no incentive or deterrent to keep that individual from intentionally harming another. In other words, how effective would the prospect of incarceration be if a criminal was able to have another serve his or her prison term? Such is the reasoning that underlies the intentional act exclusion.

Although intentional act exclusions are commonly found in workers’ compensation statutes or state judicial opinions, the precise articulation and application of these provisions can vary. Some states, like Louisiana, provide that “worker’s compensation [is] an employee’s exclusive remedy for a work-related injury caused by a co-employee, except for a suit based on an intentional act…which means the same as an intentional tort.” The statute defines intent to mean that the person who acts either “consciously desires the physical result of his act, whatever the likelihood of that result happening from his conduct, or knows that that result is substantially certain to follow from his conduct, whatever his desire may be as to that result.” Simply stated, intent in Louisiana refers to the consequences of an act rather than to the act itself.

Florida uses a slightly different approach. Like Louisiana, Florida waives workers’ compensation immunity for any injury or death caused by an employer’s intentional tort. The existence of an intentional tort, which must be proven by the heightened standard of clear and convincing evidence, can be established in two ways. The first way simply requires proof that the employer deliberately intended to injure the employee. The second way requires proof that the employer engaged in conduct that the employer knew, based on prior similar accidents or on explicit warnings specifically identifying a known danger, was virtually certain to result in injury or death to the employee. Additionally, there must be proof that the employee was not aware of the risk because the danger was not apparent, and that the employer deliberately concealed or misrepresented the danger so as to prevent the employee from exercising informed judgment about whether to perform the work. This is a significant obstacle to overcoming Florida’s workers’ compensation immunity.

West Virginia’s statute makes overcoming workers’ compensation immunity similarly difficult by requiring an injured employee to prove “deliberate intention,” which is a legal term of art encompassing numerous (and effectively higher) standards of proof that the employee must meet.

The considerable hurdles that stand in the way of overcoming workers’ compensation immunity reflect one of the central aims of the compensation bargain: that workplace accidents be addressed outside of the traditional common law framework, regardless of the severity of the injuries they cause. However, the fact that an employer will not be shielded from liability for “intentionally” injuring an employee, regardless of how that term is defined in a particular state’s statute, should serve to remind employers that their employees are not disposable assets that can be casually placed in harm’s way. Employers should become familiar with the duty of care owed to employees and should abide by that duty to be assured of enjoying the benefits of the compensation bargain.