Beginning in 2022, Oklahoma has Two New Health Insurance Companies Offering Plans on the Marketplace
When it comes to choosing the right health insurance company, Oklahomans now have two more options on the marketplace. The Oklahoma Department of Insurance announced in October that two new insurers will be joining the marketplace this year (2022), giving Oklahoma consumers more health insurance options. The same six insurers that offered individual health plans on the 2021 marketplace will return for 2022: Blue Cross Shield of Oklahoma (BCBSOK), Bright Health, Medica Insurance Company, Oscar Health, UnitedHealthCare (UHC) and CommunityCare Oklahoma (CCOK). In 2022, Centene/Celtic DBA Ambetter in Oklahoma and Friday Health Plans will join the existing six carriers. BCBSOK and Medica offer statewide plans while the others will be found in selected areas in Oklahoma.
Regardless of the marketplace plan you chose; all insurers have a duty of good faith and fair dealing towards its policyholders. More on that below.
The Basics of Bad Faith in Oklahoma
What is a bad faith case in Oklahoma?
In Oklahoma, insurance companies owe many duties to the persons they insure (policyholders), including a duty to act in good faith and deal fairly with them, particularly in the claim evaluation and handling process. An insurance bad faith claim is a claim that an insured may have against an insurance company if the insurance company does not uphold its duty to act in good faith and deal fairly with the policyholder. It usually applies to situations where the insurance company does not fairly evaluate a policyholder’s claim or otherwise treat them fairly. For example, a bad faith claim may arise when an insurance company delays or denies payment of a valid claim.
Oklahoma first recognized the implied duty of good faith and fair dealing as we know it today in the case of Christian v. American Home Assurance Co. In that case, the Oklahoma Supreme Court stated: “We approve and adopt the rule that an insurer has an implied duty to deal fairly and act in good faith with its insured and that the violation of this duty gives rise to an action in tort for which consequential and, in a proper case, punitive, damages may be sought.” 577 P.2d 899, 904 (Okla. 1977).
What are the types of bad faith claims?
There are two main types of bad faith claims, depending on the policyholder’s situation. There are first party claims, which evolve from coverage in which the insurance company is obligated to indemnify or reimburse the policyholder directly. Then, there are third party claims, which involve underlying claims that trigger an insurance company’s obligation to protect a policyholder from lawsuits by others. Within those two main types, there are three situations in which an insurance company may be found to be acting in bad faith: absence of a reasonable basis for denial of coverage, wrongful refusal to defend claims, and bad faith refusal to settle claims. Under the first situation, an insurance company may be held liable for bad faith denial of coverage if it does not have a reasonable basis for denying coverage. In the second situation, an insurer may be held liable for bad faith if they unreasonably or intentionally refuse to defend or indemnify a covered loss. Finally, almost every state recognizes that policyholders have a claim for bad faith if their insurer unreasonably refuses to settle a third-party claim within policy limits.
What are the elements of a bad faith claim in Oklahoma?
In order to bring a bad faith claim in Oklahoma, a policyholder must satisfy the following elements:
- The policyholder must be entitled to coverage under the policy at issue
- The insurance company had no reasonable basis for delaying or denying the payment of the claim
- The insurance company did not deal fairly and in good faith with the policyholder
- The insurance company’s violation of its duty of good faith and fair dealing was the direct cause of the policyholder’s injury
What types of damages are available in an Oklahoma bad faith case?
There are three types of damages available to policyholders who bring bad faith claims in Oklahoma: contract damages, compensatory damages, and punitive damages. The first type, contract damages, is the amount of money the insurance company rightfully owed under the policy, up to the policy limits. Compensatory damages, on the other hand, is money to compensate the policyholder for the emotional distress he or she experienced due to the insurance company’s bad faith. Finally, punitive damages are used to punish the insurance company for its bad faith conduct and deter it from doing the same thing to other policyholders.
What are some general examples of bad faith?
Some examples of bad faith are:
- Unreasonable delay in handling, processing, or resolving claims
- Inadequate investigation or failure to investigate a claim
- Unreasonable interpretation of an insurance policy
- Refusal to defend lawsuits or threats against the insured
- Unreasonable settlement offers
- Failure to settle third-party actions
Marketplace insurance plans are subject to bad faith laws/ Examples of marketplace insurance bad faith
The duty to deal fairly and act in good faith applies to every type of insurance, including property, health, or automobile insurance. Regarding health insurance specifically, insurance plans on the Affordable Care Act marketplace are subject to bad faith laws in Oklahoma. Some examples of how marketplace insurance plans can be in bad faith are:
- Wrongful denial of a claim by misapplying insurance terms
- Including ambiguous terms and applying them in a way that’s favorable to the insurance company
- Using biased doctors on the insurance company’s payroll to review and deny claims