The wife of a Vietnam War vet with multiple myeloma accidentally typed a “7” instead a “9” when she made a payment to Ceridian, the company that administers his COBRA benefits, meaning the $328.69 payment was short by two cents. And as the couple learned, being .006% in arrears is enough to have one’s health coverage canceled.
According to ABC News, the couple says they didn’t notice the $.02 shortage on their next Ceridian invoice, which they paid in full. But after those two cents remained outstanding, Ceridian slammed the brakes on his coverage.
Reads the original Ceridian statement:
We did not receive a full and timely payment and [the insured] was provided several notices of the shortage and a grace period reminder notice on the last invoice, along with extended grace dates as provided for under COBRA regulations.
Since the payment was not full, it fit into the definition in the regulations of an ‘insufficient payment.’ … Ceridian understands nothing is more important than one’s health. … Unfortunately, we simply do not have the capacity to be able to personally call continuants and remind them of the status of their Cobra benefits.
However, after ABC News caught onto the story, Ceridian had a change of heart. “We’ve reviewed the situation thoroughly,” said a rep for the company. “And we’re pleased to say… [the policyholder's] insurance coverage was reinstated.”
ABC also asked Ceridian if it would apologize to the man who lost his coverage. The rep’s response: “For what specifically? … We followed the normal procedures that were in complete compliance with the law and with regulations.”
Since it only acts as a middle man between those with COBRA coverage and actual insurers, Ceridian may not be in a position to look the other way if the payment is off, even by only a few cents. But given the incredibly small amount of this shortage and the fact that subsequent bills were paid in full, couldn’t there be a way for companies like Ceridian to identify situations where human error is the likely cause of the discrepancy?
Regardless of whether the policyholder or Ceridian is to blame, please let this be a reminder to always triple-check the amounts on all the payments you make to your insurer or benefits administrator.
How do you think should Ceridian have handled this $.02 shortage?