Private health insurance may terminate

Federal Court of Justice upholds right of termination of private health insurance for criminal offenses

08/12/2011

Offenses can have unforeseen consequences for private individuals. According to a recent judgment of the Federal Court of Justice (BGH), your Private Health Insurance (PKV) may have the right to terminate your contract.

Certain offenses, such as fraud, in which the health insurance or their employees take damage by the insured, are according to the judgment of the BGH a justified cause for a termination. With corresponding offenses private health insurance can dissolve accordingly the insurance contract. (File reference: IV ZR 50/11 and IV ZR 105/11)

PKV may terminate insured in exceptional cases
The judgment of the Federal Court of Justice published on Wednesday comes to the conclusion that the statutory protection against dismissal may lessen in the case of offenses committed by insured persons and private health insurance companies have the right to issue a notice of termination in such cases. The protection against dismissal for private individuals introduced in 2009 obliges private health insurances to guarantee insurance coverage for its members and, if in doubt, to place these in a basic tariff. This was to ensure that insured persons would continue to be covered by lower premiums in the event that they can no longer pay their insurance premiums. Because a return to the statutory health insurance is excluded. So far, however, it was unclear whether the dismissal protection also applies in the case of criminal offenses. The Federal Court of Justice has now denied this in its current basic judgment. In such cases, according to the BGH, there is a right of termination of the providers. However, those affected do not fall out of the system, as the other private insurance companies are obliged to offer them basic rate coverage.

The case at the Federal Court of Justice dealt with two cases in which the insured persons became criminal with their insurance or their employees and were then given notice of termination. In one case, a private insured had filed the medical bills of his wife and fictitious claims, the insurance has incurred a loss of about 3,800 euros. The BGH now confirmed the legality of the subsequent dismissal, but emphasized that the private long-term care insurance was not affected by this, as it provides for absolute protection against dismissal. In the second case, an entrepreneur had attacked a staff member of the insurance company, who had come to the insured at a check-up visit after a cardiac operation to check the reimbursements by the sickness allowance insurance, with a bolt cutter. Again, the subsequent pronounced extraordinary termination of all contracts in the estimation of the BGH was lawful.

According to the current decision of the Federal Court of Justice, dismissal protection must be interpreted in a restrictive manner and extraordinary dismissal is therefore permissible in the case of serious breaches of contract. In such cases it is „the insurance can not be expected to continue a contract at all“, so the statement of the chairman judge Sibylle Kessal Wulf in the context of the negotiation. However, general health insurance coverage will continue to be maintained for those affected as they must be covered by another private health insurance at the basic rate. The interesting question at this point is what happens when privately insured have already been taken out of private health insurance due to serious breaches of contract? However, such a scenario seems unlikely in the large number of private health insurance companies. Unlike the private health insurance, the Federal Supreme Court affirmed absolute protection against dismissal in the case of private long-term care insurance, since there is no basic rate here.

Success for the insurance industry
For the private health insurance, the current verdict is a complete success, especially as they had fiercely resisted since the introduction of compulsory insurance or legally stipulated protection against dismissal. However, this was already in 2009 a decision of the Supreme Court by the Federal Constitutional Court, which confirmed the protection against dismissal as lawful, but the right of termination for crimes remained excluded. For this purpose, the BGH has now made a decision that relativizes the statutory dismissal protection at this point. (Fp)

Picture: HHS