Insurance Administrator's Responsibility

[cgannon]

My employer has been in Chapter 11 since last November. Our health insurance supposedly is "self-insured" with an Insurance Administrator.

I was told several times in writing by my employer that I had insurand coverage through 12/31/01 and the employer continued taking out the premiums from my checks.

I had written approval from the Insurance Administrator in October 9, 2001 for spinal surgery that was performed November 7, 2001. Some bills were being paid slowly by the Insurance Administrator, however on January 9, 2002, I began receiving denials from the Insurance Administrator for claims regarding the November 7 surgery. The Insurance Administrator's reason was that the employer terminated funding as of December 31, 2001 and there was no money left to pay remaining claims.

If the agreement between employer and the Insurance Administrator was not truly a self insured agreement, and the Insurance Administrator is responsible for paying the claims then charges back the cost plus a service fee to the employer, then how much recourse do I have against the Insurance Administrator? My bills left hanging total at least $30,000 and my other co-workers have bills as much as $50,000 and more.

Also, what recourses do I have against the employer for taking out the premiums and not paying the Insurance Administrator sufficiently to be able to pay our claims?

 

[ALawyer]

As the employer was in XI, The claims should have priority status as employee and administration claims.

If there are many of you, given the sums involved, collectively retain counsel to represent you in the bankruptcy proceeeding.

 

[cgannon]

I have written the Department of Labor explaining the situation as well as notifying the Bankruptcy Courts (so have many of my co-workers).

We think the company is going to file Chapter VII in the very near future, perhaps at the end of this month. What effect will this have on our ability to be able to recuperate our claims??

 

[ALawyer]

One can not get money out of a stone, and that is what the employer seems to be. Again, as you may have priority claims you may be okay iof there is anything left after fees and top priority claims.

You'd need a lawyer to go after the adminisitrator, and it is high time to get one given the sums involved.