Pennsylvania’s attorney general has sued a Texas company that allegedly stopped paying employees’ health insurance premiums for five months before its insurer retroactively canceled coverage, leaving some people with tens of thousands of dollars in unpaid medical bills.
Attorney General Tom Corbett’s consumer-protection lawsuit targets Dallas-based Turbine Airfoil Designs Inc., which manufactures aircraft engine parts. It was filed in Dauphin County court on Oct. 8.
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.
“These workers made good-faith efforts to purchase health insurance in order to protect themselves and their families, only to be victimized twice – with smaller paychecks and canceled coverage,” Corbett said.
Company officials did not immediately return a telephone call from the Associated Press.
On Oct. 12, a day after The Patriot-News published a front-page story about one former employee who is stuck with $70,000 in medical bills from an operation in February to fix an aortic aneurysm, the insurer, Capital BlueCross, said it would help former employees who were wrongly denied coverage.
“Capital BlueCross is a business, but we are also a nonprofit organization with a 70-year community mission,” said William Lehr Jr., president and chief executive officer of the Harrisburg-based company.
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, Corbett said.
Capital BlueCross retroactively canceled the coverage in March, although a spokesman for the insurer said efforts to get the company to pay up continued until a federal judge recently approved a creditor’s request to auction off the plant’s equipment.
“We realized at that point that we weren’t going to collect any money from them,” said David Skerpon, vice president of corporate communications for Capital BlueCross.
The employees’ insurance cards remained valid initially. Whenever hospitals and medical practices checked, the insurer told them the medical care was covered. Now, hospitals are billing the ex-workers for the full price – not the discounted rates their insurance provided – and turning over some to collection agencies.
Turbine Airfoil acknowledges that it is responsible for the bills, but says it cannot afford to pay them, the newspaper said.
Skerpon said Capital BlueCross did nothing “legally wrong” and followed proper procedure, but is helping the employees because it’s the right thing to do.
“We totally understand the frustration and … even anger the former employees feel,” he said. “We feel that it should not be directed toward us.”
Topics Lawsuits Texas Pennsylvania
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