Why would my medical insurance company want to know if my company is incorporated?

Question

My husband and I own our own business. He had to have surgery on his foot and now our insurance company wants me to fill out a claim form with tons of questions. I'm fine with it but I want to know why they would want to know if my business is incorporated or not. It is but I'm still curious as to why they would care. Any ideas?

Answer 1

Well, it matters if it's health insurance, or workers comp.  And, it matters what state you're in.  Your health insurance company doesn't want to cover a workers comp claim, and the workers comp company doesn't want to cover a non-work related injury.

So when you have a tiny small business, each of those carriers looks at the claim very carefully, to see if you guys are committing fraud (fraud, meaning, trying to pass off a WC claim to your health carrier, or pass off a non-work related injury to a WC carrier).

Answer 2

simple.. it's all about the money. Remember they are a business too.. so if they don't a have to pay for any reason they can find, it keeps the money in house and they don't have to pay out. Now to find out if there is an exclusion on your policy if an owner is also incorporated?

Answer 3

It may be a reporting requirement for the IRS. Premiums paid by S corporations on behalf of principals of the corporation must be included above the line on your 1040, as per IRS Section 100 and / or section 125.

However, the form is probably a one size fits all and if there is a circumstance somewhere sometime where they need to know this, now is the time to ask.

Don

http://mtnhealthinsurance.com

Answer 4

They are hoping that your answer will differ from what you told them when you applied for the insurance.  If you lied on the insurance application, they can cancel the policy now to avoid paying for the surgery.