Austin residents may hardly think about their health insurance as they go about their daily lives. They may glance over their Explanation of Benefits and just pay what the provider says the provider is owed.
But in a major health crisis or after a serious injury, Texans will pay much closer attention to their health insurance benefits.
After all, if the health insurance company delays, underpays or denies benefits, a patient in a health crisis can face medical bills running into seven figures.
To pay for necessary treatment, a Texan may have to face bankruptcy or the prospect of trying to raise the funds by asking for help or raiding one’s retirement assets.
Like other insurance companies, health insurance carriers must follow the terms of their policy as well as all Texas and federal laws. They may not delay or deny benefits in bad faith.
What is or is not bad faith will depend a lot on a person’s circumstances and the language of the insurance policy. Some examples of bad faith include automatically denying a claim for benefits without investigating and requiring extra, unnecessary paperwork to get benefits.
If a health insurance carrier acts in bad faith, then the patient needing the benefits may have legal options under Texas law.
They may be able both to compel the insurance company to pay and obtain additional compensation from the insurance company for the trouble.
Employer health insurance claims may be subject to ERISA
Many people have health insurance through their employer’s plans. Like retirement and employer-sponsored disability plans, employer health insurance plans are subject to ERISA. ERISA is a federal law designed to give workers assurance that they will get the benefits their employer promises.
The provisions for ERISA may provide additional protections for workers. On the other hand, some ERISA requirements may supplement or even contradict Texas law.
For example, under ERISA, workers are expected to try administrative appeals before suing their insurance companies for bad faith.
Handling a health insurance dispute under ERISA can be a complex matter. Texans facing this situation will want to make sure they understand their legal options.
