Township examines health gaffe

   MONROE — Township officials are investigating why 93 municipal employees had their health insurance coverage canceled recently.

By: Leon Tovey
   MONROE — Township officials are launching an investigation to determine why 93 municipal employees had their health insurance coverage canceled recently, and why 120 more almost suffered the same fate.
   Township Business Administrator Wayne Hamilton said this week that the township’s municipal auditor, the Woodbridge-based accounting firm O’Neill & Lang, would conduct a "very thorough, very professional review" of how the township finance office handled payments to Aetna Inc. and Horizon Blue Cross Blue Shield.
   Mr. Hamilton said the township had been late paying its November and December premiums to both insurance companies, but he said Aetna overreacted to the situation. He said the company should have made more of an effort to contact township officials to resolve the matter before canceling coverage for 93 township employees.
   Mr. Hamilton said he learned about the problem with Aetna on Jan. 5, when he was contacted by a township employee who had been denied medical services. He said he did not know exactly when coverage was terminated, but that as soon as he learned of the cancellation, he contacted Aetna representatives and notified township department heads.
   He said he also issued letters guaranteeing payment by the township for medical services to affected employees and made arrangements with the Monroe Park Pharmacy to fill their subscriptions over the weekend.
   Coverage for the employees was reinstated Monday morning.
   Walt Cherniak, a spokesman for Aetna, said his company decided to terminate coverage because the township owed the company nearly $200,000 in overdue premiums and because repeated attempts to settle the matter with the township had failed.
   Mr. Cherniak said he didn’t have exact details about those attempts, but said "there were multiple letters, multiple phone calls — many of which went unanswered."
   Mr. Hamilton said he could neither confirm nor deny that assertion, but he said no one from Aetna contacted his office. "They may have sent notices and those notices probably came into the building," Mr. Hamilton said. "But I didn’t see them.
   "If there was a breakdown below me, they should have come up the chain of command," he added. Mr. Hamilton also disputed the $200,000 figure. He said the problem with Aetna arose because township officials thought Monroe was owed a $38,427.30 credit for changes in enrollment over the course of the year, and applied that credit to its November payment.
   But Aetna, which has provided insurance coverage to township employees for 10 years, refused to acknowledge that credit and demanded the full $78,833.50 payment for November.
   The problem was exacerbated when the November payment was not made until Dec. 16 and the December payment of nearly $71,928.40 was also late — but still within Aetna’s 30-day grace period, Mr. Hamilton said.
   Mr. Hamilton said the only way he could account for the discrepancy between what Aetna says it was owed and what township officials thought they owed was to include the January premium of $88,935.75, which was due Jan. 1 and which hadn’t been paid by Jan. 5.
   "But again, that’s still well within the 30-day grace period," he said. "For all they knew the check could have been in the mail."
   Mr. Hamilton called the lateness of the payments "inexcusable," but he pointed out that checks for the back premiums were sent to both Aetna and Horizon via overnight mail as soon as the problem was brought to his attention and that Horizon held off on termination of its coverage.
   He said the problem with Horizon also was based on differences over credit adjustments. The township subtracted $62,410.32 from its November payment to Horizon and $12,464.13 from its December payment.
   But Horizon, which provides insurance to 120 township employees, also refused to acknowledge the credit and Mr. Hamilton said the township received a notice of termination from the company on Jan. 3. He said that he didn’t see the notice until Jan. 5 and that he still has not seen any notices from Aetna.
   Cathleen Coleman, a spokeswoman for Horizon, declined to comment on why her company had sent a termination notice to the township, but did say the township’s account was "in good standing" as of Monday.
   Mr. Hamilton said the premiums for both companies were now paid until the end of January and that township officials are working to set up wire transfer accounts to pay the premiums automatically. The accounts should be operating by Feb. 1, he said.