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Company collected employees premimums but didn't pay for coverage

Posted by on Sep. 7, 2009 at 7:04 AM
  • 2 Replies

Harrisburg company collected health

insurance premiums, but didn't pay for employees' coverage

by DAVID WENNER, The Patriot-News
Saturday September 05, 2009, 5:00 PM

JOE HERMITT, The Patriot-News Don and Delores Maus discovered that the company Don worked for, Airfoil Designs, stopped paying for employees' health coverage but didn't tell them. They are among several employees facing a lot of medical bills incurred during that time.

How does it feel to have health insurance contributions deducted from your paycheck, then find out you didn't actually have insurance, and now are expected to pay thousands in medical bills? Ask employees of Turbine Airfoil Designs Inc. in Harrisburg, Dauphin County.

TAD stopped paying toward its Capital BlueCross group plan in October. TAD employees said they didn't know that. For five months, their believed coverage remained in effect. Or so it seemed, since their insurance cards remained valid.

In March, Capital sent TAD employees letters saying their coverage had been canceled retroactively to Oct. 9. Now some TAD employees face five months' worth of medical bills. Some have bills totaling $10,000 or more. State agencies are investigating.

"I have collectors calling here pretty much on a daily basis," said Jason Beachler, 39, of McAlisterville. He said he has $3,000 in bills from incidents including an emergency room visit after his wife got glass in her eye.

Gary Murdock of Monroe Township has $12,000 in bills stemming from medical care for this two children. "I was paying for family coverage ... $200 plus per month. Where is the money at?," said Murdock, 33.

TAD, on North Cameron Street in Harrisburg, makes parts used in airplane engines. John Walton, the Dallas-based CEO of TAD, acknowledged the lapsed coverage. He also said TAD managers never expected health benefits to end, and he maintains Capital should not have terminated coverage.

He said TAD missed the payments because of the recession, and because it has been in desperate financial straits since late last year. When asked who is responsible for the medical bills, Walton said TAD is responsible.

Meanwhile, TAD has laid off workers and is struggling to stay alive.

Capital BlueCross spokesman Joe Butera said Capital followed the rules in notifying TAD employees of the termination. He said Capital spent several months trying to work with TAD to bring payments up to date and preserve coverage. It reached the point where continuing to carry TAD would have been unfair to paying customers, he said.

Butera further said it was TAD's responsibility to inform workers of the payment situation and possible loss of coverage.

The state Attorney General's health care section is focusing on "the retroactive nature" of the coverage cancellation, said Nils Frederiksen, a spokesman. On Thursday, he said it was too early to say if any laws may have been broken, and who is legally responsible for the bills. But he said TAD employees shouldn't get stuck with them.

The state Insurance Department also is investigating.

The Attorney General's health care section says affected TAD employees may call 717-705-6938 or 877-888-4877 during normal business hours.

This really makes me sick. I don't know what the laws are but I think this company should have to pay all the bills the employees incurred when they thought they had insurance.

The scary thing is any conditions that were new during that time are going to be considered pre existing and with a lapse in coverage even if the past bills get paid the employees may still be screwed.

by on Sep. 7, 2009 at 7:04 AM
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by on Sep. 7, 2009 at 7:11 AM

Not supriseing at all, that has happened before hence why so many *average* americans are haveing to file bankrupcty.  Its horriable what the company did but this will not be the last we hear of this Im sooooo sorry to say.

by Silver Member on Sep. 7, 2009 at 12:05 PM

Sounds like a class action lawsuit to me. The paper trail will be easy to find and they also should call the BBB, local TV and newspapers.

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