Company's Failure To Pay Health Insurance Leaves Employees Swimming In Medical Debt

October 26th, 2009 by Reed Allmand

According to an article in the Dallas Morning News, Pennsylvania’s attorney general is suing Turbine Airfoil Designs, Inc. a Texas company, for allegedly not paying employees’ health insurance premiums for five months despite the fact that the company was deducting a portion of the employees’ paychecks for health insurance.  Because of the company’s failure to pay the insurance, Capital BlueCross retroactively canceled coverage, leaving many employees with tens of thousands of dollars in unpaid medical debt.

The article said:

“The civil suit, which names the company’s chief executive officer, president and chief financial officer, seeks full restitution for the 90 employees of the company’s former Harrisburg plant and thousands of dollars in fines…The financially troubled Turbine Airfoil stopped paying its health-insurance premiums in October 2008 without telling the employees, even though it continued to deduct the employees’ portion from their paychecks…”

One employee was even left with $70,000 in medical debt after he had an operation in February to fix an aortic aneurysm.  Capital BlueCross claims that it is searching for ways to help the employees; but in fact some of the medical debt has already been referred to collections. Hospitals are charging the employees at the full rate, not the discounted rate offered the insurance company and aggressively pursuing employees for payment.  What will happen to these employees if Turbine files bankruptcy or simply does not pay the medical debt?  Most likely the creditors will still pursue the employees for payment of the medical debt until they are either paid via the bankruptcy of Turbine or receive payment from the employees. It’s a patently unfair situation.

About Reed Allmand

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Allmand's vision is rooted in his own financially precarious childhood in Abilene "My father always had difficulty holding a job and supporting our family, so after my parents divorced when I was 12, my sister and I got jobs to help make ends meet," he recalls. "I remember what it felt like as a child to worry that our car would be repossessed or home foreclosed on."

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