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Employer failure to pay premiums may constitute fraud

If asked, many people in Kentucky would probably say that having health insurance is very important in their lives. They pay premiums and expect that the insurance will be there if they need it. A class action suit alleging fraud was recently brought against a now bankrupt hospital in the eastern part of the state.

The litigants are former employees of the hospital. They claim that the hospital withheld money from paychecks to cover the employee share of the premiums but failed to pay the insurance premiums. This resulted in the employees being personally responsible for millions of dollars in health care bills that they believed they had health insurance to cover.

Employees became concerned when they began receiving bills for medical care that they had believed would be covered by their insurance. One woman contracted a serious case of the flu and required hospitalization. She received a bill for $400,000. Anthem, which carried the policy for the employees, reported that it had received no premium payments from April 2017 to May 2018, causing the company to terminate coverage. The former employees are suing for damages incurred.

Paying for a service implies that a service will be delivered and failure to deliver can constitute fraud. Health care is expensive and finding out that one is responsible for thousands of dollars in medical bills would be disastrous for most American families. The people of Kentucky have a right to expect that if they pay for health insurance they will receive health insurance. If a person suspects fraud, consulting with a professional can provide insight into what one's legal option might be.

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Green Chesnut & Hughes PLLC
201 E. Main St.
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Lexington, KY 40507

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