Human resources managers were recently given insight into the new law and regulations surrounding the provision of health insurance by Mervyn Conolly, head of the Health Insurance Commission.
Superintendent of Health Insurance Mr. Conolly explained some of the misconceptions and misinterpretations that the new rules regarding the Standard Health Insurance Contract, known as SHIC, which came into effect in March, are already attracting.
For example, grandchildren cannot be considered to be dependents under the redefined definition of dependents in the new law unless they are adopted or fostered by their grandparents who hold the relevant insurance policy.
Mr. Conolly said that since the law was passed in December, several grandparents had approached the commission to see if their grandchildren could be covered under their SHIC contracts.
The law and its associated regulations apply only to the Standard Health Insurance Contract, but not to supplemental policies that are based on the SHIC plan.
Mr. Conolly said that about 90 per cent of Cayman’s population had health insurance. It is mandatory for every person in the Cayman Islands to have health insurance.
“I wish we had 100 per cent of people covered. The fact is we’re not there yet,” Mr. Conolly told a packed room of HR professionals at UCCI earlier this month.
“Based on the latest statistics from approved insurers from last year, we have in excess of 51,000 people covered. There is between 55,000 and 60,000 people in the Cayman Islands. We have around 10 per cent of the population still not covered. In that 51,000 plus, there are some persons with double coverage, who are insured by CINICO and by another insurance company. We believe that the coverage level is about 90 per cent or a little bit more than that,” Mr. Conolly said.
The amended law and regulations make it tougher for insurance providers to refuse to insure a person, as they must now get permission from the Health Insurance Commission, and if necessary the Grand Court, if they want to turn down an application based on a person’s existing medical conditions.
An insurer also has the option of charging high-risk individuals a higher premium. If they charge up to 200 per cent of the existing premium to cover a person, they must notify the commission. If they charge above that, they need the commission’s permission to do so.
One inspector from the Health Insurance Commission has been assigned to look into such cases and those would be turned around “in a couple of days” if all the relevant paperwork is in place, Mr. Conolly told the HR managers.
Another aspect that has been causing some confusion is a stipulation that states that if an employee leaves a company or is terminated, the employer must give that former employee the option of continuing to be covered under the company’s policy for up to three months or until the employee gets health insurance with a new employer within that three-month period. The ex-employee would pay for his or her own premium.
“We have had a lot of questions with this,” Mr. Conolly said. “Dependents are eligible and are also covered in that three-month period where your former employee is concerned. You [the employer] don’t have to pay the premium, but you need to allow them [the employee] the facility to remain on your plan in that period,” he said.
Mr. Conolly advised employers to ensure that they draw up a written and signed agreement if the employee is to remain on their insurance plan for the three-month period or if the employee says he or she no longer wishes to remain under that plan, thus avoiding any conflict or confusion if an issue over coverage arises.
The new law also addresses portability, whereby an insurance company must agree to cover an employee if he or she changes jobs. Mr. Conolly explained that this only applies if an individual has been covered by the relevant policy for at least one year. If a person changes jobs after only six months, then portability is not assured. “You have to have it in place for a year and there should not be any break that exceeds three months,” Mr. Conolly said.
He told attendees that gone were the days when healthcare was a service, “it’s now the healthcare business”. And because of this, people had to be aware that if they over-use their insurance benefits, this would have a knock-on effect on their future premiums.
He urged people not to abuse their insurance simply because their policy entitled them to a certain amount of benefits annually.
“When you need it, you need it, but understand, the more you use, the more it is going to cost,” he said. “Don’t go to the dentist five times a year just because you are covered.”
Prior to the new regulations, insurance companies had their own definition of pre-existing conditions, which varied from insurer to insurer. “We tried to standardise it,” said Mr. Conolly.
Under the regulations, a pre-existing condition is defined as “a medical condition known to the employee or insured person prior to the date of a health insurance contract or a medical condition for which treatment was given or recommended or drugs taken or prescribed or of which symptoms were or had been manifest during the period of 12 months prior to the date of the health insurance contract and of which the insured person should have been aware”.
The insurance superintendent urged people not to lie or make omissions when filling out the standard enrolment forms for their insurance because, for example, if they turn out within 12 months to be diagnosed with a condition for which they underwent tests prior to signing the form and have not mentioned the test on the form, the insurance company can subsequently refuse to cover their treatment and can also charge that client for any types of claims made in the intervening period.
Insurers can only check a new client’s medical history back 12 months prior to a person joining a policy, Mr. Conolly said, adding that this stipulation applies to both SHIC and supplemental plans.
The Health Insurance Commission’s role is to monitor and regulate the health insurance industry in the Cayman Islands. This includes the assessment and monitoring of premium rates, the administration of the Segregated Insurance Fund, monitoring the conduct of approved insurers, resolving complaints and advising the minister of health.
For more information, email [email protected]