A few weeks ago, we discussed an employee benefits insurance policy and what it is so essential for a charter school to carry. The insurance policy will provide coverage for the mismanagement of your company’s benefits plans. To help explain this coverage a little better, we wanted to give a real scenario that happened to one of our charter school clients.

The Claim:

A charter school provided an HMO health plan to its employees.   Recently, the HMO denied payment on the health costs for an employee hospitalized following an accident. The HMO claimed the employee never notified them of her accident and hospitalization as was required under the health plan.

The employee had notified her charter school’s plan administrator of her hospitalization, who advised her that she didn’t need to notify the HMO because she had told the school. Unfortunately, the HMO had recently changed its notification rules which now state that the employee is required to notify the HMO first.

The employee then sued the charter school for benefits denial, alleging that she had received improper advice that led to her claim denial.

Result: 

The case settled for more than $500,000, the amount of her hospitalization plus attorney fees. Luckily, the charter school carried an employee benefits insurance policy that paid for the entire claim.