Companies sue Blue Cross Blue Shield for allegedly charging hidden fees
- Employers are suing Blue Cross Blue Shield of Michigan (BCBSM) for allegedly charging unauthorized fees to their health plans, reports Legal Reader. The plaintiffs accused the insurer of trying to increase its revenues without upsetting consumers by skimming employers. The list of plaintiffs include colleges, hospitals and companies in the auto and plastic industries.
- Legal Reader says Blue Cross' alleged unsavory business practices go back to the 1980s, when the company lost customers behind surcharges it imposed on them. Blue Cross reportedly replaced the fees with hidden markups customers could no longer see. The 6th U.S. Circuit Court of Appeals said the company's actions merited extending the statute of limitations, which allowed lawsuits occurring years after the fees were imposed to move forward. A 2014 appeals court decision said Blue Cross violated the Employee Retirement Income Security Act (ERISA) and forced it to pay $6 million as a settlement.
- One employer, Williams Chevrolet, Inc., said it sent money to BCBSM to pay employees' healthcare claims, but the insurer also skimmed administrative fees to pay claims. Legal Reader says more lawsuits against BCBSM are likely.
Healthcare costs are too high for HR managers not to account for every healthcare expense their organizations incur. Employers in a recent survey predicted a 5% hike in medical and pharmacy benefits costs in 2018 for the fifth straight year in a row. An estimate of this year's total healthcare costs is $13,482 per employee, which is expected to rise to $14,156 in 2018. Employers' share of the cost will be 70% and employees will cover about 30%, or about $4,400, next year.
Auditors should be periodically assessing plans for shortages and discrepancies. Contracts should be clearly written and air-tight to make breaching hard to do and easier to detect.
HR also must make sure ERISA provisions are thoroughly understood. The sometimes complex regulation governs private-sector health and pension plans to protect participants. Plans must provide participants with information about plan features, funding and the fiduciary responsibilities of administrators. ERISA also requires fiduciaries to provide plan participants with a grievance and appeals process, and allow participants to sue if fiduciaries breach their responsibilities.
Employees are sometimes confused about their benefits. HR should make benefits information available to employees all year around and not just during open enrollment so that, when it's time to make annual plan selections, they understand coverage and costs.