Without going into the details of his particular case, I submit to you an alternate case, one drummed by my father-in-law to prove his point.
You have a $200 prescription to fill at a major retailer. You know you will be reimbursed 100% for the prescription. You decide to pay for half of the amount due with a gift card and the other half with cash. When you submit your claim and receipt to the insurance company, they only reimburse you for $100. Do you think you should be entitled to receive cash back for the gift card you spent?
I think no. The insurance company agrees with me and said they will only reimburse you if you can prove that you bought the gift card yourself.
Here are my reasons for siding with the insurance money:
- When you buy a gift card, you are buying store credit. Store credit is not cash out of your pocket. It's prepaid. It's cash out of some other person's pocket, (unless you bought your own gift card.) Ergo, the insurance company isn't going to reimburse you for money that isn't yours.
- Gift cards cannot usually be redeemed for cash, only product at the store. Most gift cards actually have that printed right on them. When you pay for a prescription with a gift card, getting reimbursed is like getting cash back for it from the insurance company. That's illegal.
- Gift cards act like cash, so they should be treated like cash by insurance companies.
- It shouldn't matter what method you pay for something, you should receive what you are entitled to when asking to be reimbursed by an insurance company.
I feel like the only person who's out money is the person who bought the gift card. Everyone else is all squared up. I also feel like the insurance company saved some money, but they didn't actually gain any money. The retailer is the only place that gained any money.
So, I emailed the Consumer Protection Office to find out what they had to say on the matter and I never heard back from them. EDIT: I just heard back from them! They suggested I contact the Insurance Branch of the Government as they deal with complaints regarding insurance. Or to just contact the insurance branch who denied the claim in the first place to review their policy.
I tried finding more information online, but when I ran various phrases in the search engine nothing relevant came back. I posted the question in Yahoo! Answers and had 2 people tell me that I was right, but they didn't cite any references.
My father-in-law is in a losing battle and should give up on the issue and take it as a learning experience. I've never been in his situation before, but now I know never to pay for something with a gift card if I want to be reimbursed by an insurance agency. There's no sense trying to cheat the system and figure out a way to get that money through illegal loopholes. At the end of the day, he still hasn't lost any money and everybody's squared.