Submitted by achenault on Tue, 01/12/2016 – 3:21pm
When health insurance companies become insolvent, what happens to consumers with pending claims that can no longer be covered by their insurance? A bill recently passed in Ohio will expand the safety net that protects consumers if the insurance company holding their health, life, disability, or long-term care policy becomes insolvent.
A fund currently exists that will provide up to $100,000 per consumer for pending claims if an insurance company becomes insolvent. Senate Bill 223, sponsored by Senator Kevin Bacon and unanimously passed the Ohio General Assembly in late 2015, raises the amount of the protection to $300,000 for disability and long-term care insurance claims and $500,000 for hospital, medical, and surgical claims. The bill also adds a $250,000 maximum coverage limitation for each payee of a structured settlement annuity or the beneficiary of such an annuity. The claims are paid by the Ohio Life and Health Guaranty Association, which was created by state law and is funded by payments from insurance companies.
Ohio Lieutenant Governor Mary Taylor, also director of the Ohio Department of Insurance, announced the changes in a press release on Monday, January 4. “I am pleased that these statutory changes will ensure Ohio consumers are standing on firmer financial ground in a worst-case scenario situation,” said Taylor in the press release.
These changes will expand Ohio consumer protections against devastating financial consequences if their insurance company becomes insolvent before it pays a pending claim. Senate Bill 223 is a good example of bipartisan work by the Ohio General Assembly.