Don’t Get Spooked This Hallowe’en – In Health Insurance, the Devil is in the Contract Details

“One World Cover demands the best from us insurers. Their focus is very much on correct benefits, correctly priced, correctly contracted and correctly administered, all of which are very much in the best interests of the client” Allianz Worldwide Care

It’s often said that the “Devil is in the details”. Insurance companies have a devilish reputation for finding ways not to pay claims. And while that is sometimes true, the reality is that it’s very difficult for an insurance company to deny a claim if the contract you have with them says otherwise. So, in health insurance, the devil really is in the contract details. Below are 4 tips that will help ensure your health insurance contract is fully protecting your faculty and that no one gets spooked this Hallowe’en season.

Obsess over even the smallest details

We are constantly amazed at how often we speak to CFOs and HRDs at prospective international school clients who have never even seen their health insurance contract. And those that have seen the contract are usually not that confident that it would fully protect their faculty and their families in the event of a dispute.

At One World Cover we are obsessed with the details of our clients’ health insurance contracts (and the policy wording contained within those contracts). The reason we obsess over our clients’ contract is that it’s one of the most important ways of ensuring that our clients are well protected and therefore a cornerstone of our faculty first approach to delivering world-class employee benefits programs, with empathy, warmth and care.

If you are the person responsible for handling your school’s health insurance – and therefore ultimately responsible for ensuring that your faculty and their families are fully protected – you (or someone appointed on your behalf) too should obsess over the details of your health insurance contract. Here are just a few of the important details that should be checked:

Underwriting – Does your plan cover pre-existing health conditions? The specific insurance underwriting terminology you should be insisting on is known as “medical history disregarded” or “MHD”. You’ll also want to ensure that you have MHD up to an age that aligns with your hiring policy, meaning if you are hiring employees aged 60+, for example, does your insurance contract ensure that those employees’ pre-existing health conditions are covered, because many insurers will only cover pre-existing conditions up to a maximum age of 60.

Many insurers are moving their standard underwriting rules from MHD to “LMHD”, or “limited medical history disregarded” which means that some pre-existing conditions will be covered, but not all, and importantly, not anything serious or costly. For international schools we would only ever recommend MHD underwriting/full cover for pre-existing conditions and the language in your contract that stipulates how pre-existing conditions are covered should be very clear on this point. Below is an example of underwriting language that we would not be comfortable recommding to our clients:

Eligibility – Do the enrollment eligibility rules for your plan meet your needs? Some insurers as standard will only allow enrollment of eligible employees up to a certain age, so you’ll also want to carefully check these rules align with your hiring practices (see also tip 2 below). For example, some insurers won’t allow unmarried or same sex couples to be enrolled under the plan together.

Exclusions – Carefully review all your plan’s exclusions. All insurance contracts will include your insurer’s standard exclusions, but the list of standard exclusions might not meet your needs. You might want some exclusions removing (or even adding) if they are not consistent with your school’s culture or approach to health and wellbeing.

Lifetime limits – We have seen lots of schools caught out by not realizing that certain benefits have a lifetime limit or cap, rather than an annual limit. Be sure to ask your insurer if there are any lifetime limits – and then make sure those limits are clearly stated in the version of the table of benefits or policy documents that are shared with your faculty.

That’s already a lot of questions that need to be answered, and that’s only 4 unique parts of the contract. Insurance contracts are long and cumbersome. Reviewing and understanding a health insurance contract is a big job (see tip 4 below). But carefully reviewing each and every paragraph and clause in your health insurance contract could be the difference between your insurer saying they are denying a million dollar claim and then realizing that they must pay it because the contract you have with them says they must. We are not trying to scare anyone – we have seen it happen, even with large reputable insurance companies.

Carefully review the changes that are made to your contract at renewal each year

This one is especially important since you can easily get caught out. Every year insurance companies will make changes to their standard policy wording. While they are obligated to inform their clients, they can be vague with the details when doing so. When you receive your new insurance contract, make sure to ask for the Word version of the document with tracked changes, so you can easily check all the changes when compared with the previous year’s version. Further to this, use reputable software or a secure online tool that can help compare changes between two documents.

Make sure your health contract wording aligns with your employee’s employment contracts

Many schools have very specific rules about what type of health insurance they need to provide to their employees, and up to what age they need to provide the insurance. It’s obviously critical that as a school you are not making promises about your health insurance that aren’t reflected in the health insurance that the school actually buys, and that is best achieved by carefully reviewing the health insurance contract. Much of what is noted in your insurance contract will be the insurer’s standard wording, which can be changed to meet your needs. Rather than just accepting what is in the contract, ask for the standard contract wording to be updated to meet your needs.

Hire a qualified broker to help you

Health insurance contracts are typically 150+ pages long. They are full of insurance jargon and the language can be cumbersome and tricky to understand. It’s unlikely that you are a health insurance expert, and are not expected to be. Time and time again we have seen people settle for inferior cover by just accepting the insurance contract as it is sent to them, simply because they do not have time to thoroughly review the contract or spend the time to negotiate with the insurer for certain changes to be made. Rather than settling for inferior health insurance, or insurance cover that does not align with your school’s hiring practice or culture, simply outsource the contract review work to a qualified broker. That same broker can also advise on how your cover can be improved to even better meet your needs, and will be on hand to fight your corner in the event of a claims dispute.

Whenever an insurance provider we work with denies a claim the first question One World Cover always asks is: “What does the contract say?”, because ultimately so long as your health insurance contract meets your needs, and you have the right insurance broker fighting your corner, the insurance company will find it impossible to deny claims that have been wrongfully denied.

Want to learn more?

If you are concerned your health insurance contract does not adequately meet your needs, is not fully protecting your faculty or is putting your faculty at risk, please get in contact and we can set-up a time to review how we can improve things for you going forward. Thorough contract review and alignment with international schools’ internal policies, hiring practice and culture is just one of the ways we help improve the lives of our client’s faculty, by delivering world-class employee benefits programs, with empathy, warmth and care.

To learn more please get in touch: [email protected] or click here to contact us.