People who enroll in health insurance benefits trust that their provider will operate in good faith and help them cover their medical costs. As the Salisbury Post recently reported, sometimes employers and insurance companies fall short on this duty.
This is precisely what happened in the case of several former Durafiber workers. The plant closed on September 12, 2017 but Blue Cross had assured health plan participants that they have coverage through September 30, 2017.
One former employee, Velvie Gray, had medical expenses exceeding $60,000 after undergoing a procedure in August 2017. Blue Cross denied his claim, forcing him to pay a significant portion of what he owed out of pocket.
He owed more than $18,000. Blue Cross also declined coverage for the prescriptions and physical therapy he needed to recover after the procedure.
Despite denying Gray’s and others’ claims, Blue Cross had an obligation all along to provide coverage. They offered group health benefits to the Durafiber workers under an administrative service only (ASO) product.
Frank Papa, chief executive officer of Durafiber and Erwin Bette, the chief financial officer of Durafiber were aware that the ASO arrangement would make it possible for Blue Cross to ignore employees’ claims. However, the Durafiber executives didn’t mind because it would minimize their costs and obligations in the face of bankruptcy and the plant closing.
The downfall, in this case, is two-fold. Durafiber had an obligation to fund the group health plan, and Blue Cross had the duty to provide accurate information to participants about their coverage.
The consequences for the now jobless Durafiber employees were staggering. They were saddled with unexpected and overwhelming medical costs, with no way to pay them. This resulted in a devastating blow to the former workers’ overall well-being.
The Durafiber executive’s’ and Blue Cross’ actions are reprehensible. We have helped the former Durafiber employees organize a class-action lawsuit and will be representing them to help them recover.