Cancer Patient Loses Health Insurance Over $.02 Error

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?

2 Cents May Mean the Difference Between Receiving Lifesaving Surgery or Not [ABC]

Comments

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  1. Mr. Fix-It says: "Canadian Bacon is best bacon!" says:

    All for the lack of:

    Tuppence. (Tuppennies?)

    • Whiskey Tango Foxtrot says:

      Only if the insurance is underwritten by the Dawes, Tomes, Mousely, Grubbs, Fidelity Fiduciary Bank!

    • cloudedknife says:

      patiently, cautiously, trustedly invested in the…

      middle man between cobra and your insurer?

  2. MattO says:

    call me an a$$, but i dont really think they did anything wrong canceling the coverage – maybe morally…but if you were short on your cable bill, they will cut off service too – it is just because this is health insurance that people get up in arms about it.

    Morally, i agree for 2 cents, they shouldnt cancel coverage – but as a computer programmer, and an employee of a health insurance company, i can understand where a computer flagged the person as behind, doesnt really care by how much – and just automatically recinds coverage.

    • Taed says:

      And once you say that $0.02 is OK, then where is the line drawn? Is it OK to cancel it for being $1.02 short? $10.02? $100.02?

      But according to the quote “[the insured] was provided several notices of the shortage and a grace period reminder notice on the last invoice”. If that’s true, then how did [the insured] miss those notices?

    • diasdiem says:

      I’m willing to bet that it’s more on the lines of “check each month for a technically valid reason to drop coverage for policy holders with expensive diseases” program than a “flag everyone who falls behind and cancel their policy” program. If you’re perfectly healthy they don’t mind giving you a chance to catch up, but if you’ve got cancer, they know you’re never going to be worth it and want to dump you as quickly as possible. Just like that insurer that automatically flagged newly-diagnosed HIV patients to look for grounds for rescission. They just can’t do it by looking for discrepancies in your original application anymore. The game’s the same, it’s just the rules that change.

      • InsertPithyNicknameHere says:

        Actually, since Ceridian, the company who cancelled the polisy, is a third-party administrator, they would have no way of knowing what claims were being made against the insurance. Having worked for a third-party insurance administrator for 8 years, I can say that it really is most likely that the person was dropped for being consistently behind on payments.

    • Straspey says:

      “…but if you were short on your cable bill, they will cut off service too – “

      Not true.

      If I’m two cents short on my cable, phone bill or power bill, my next bill will simply show a “Balance Due From Previous Bill” added on to the current balance.

      It would take at least two billing cycles for me to receive a “Notice of Cancellation” which will also provide me with plenty of information and opportunity about how I may rectify the situation BEFORE any cancellation of services occurs.

      AND…Those procedures are all built into their computer billing systems.

      • GuyGuidoEyesSteveDaveâ„¢ says:

        And the same thing happened here. They kept NOT paying the $.02

        • coren says:

          The way my cable bill works, and I can’t speak for anyone else, that will be part of (not just a notification, but part of my new total) my next bill. Maybe a late charge too. They should have caught that they were missing that 2 cents when looking at the bill, but it seems like the company brought it up in the way most likely to be missed.

      • TheRedSeven says:

        The difference is that COBRA insurance is a PRE PAID program. You pay in January for coverage in February. Until payment is received in full, you DO NOT receive the service. (What this really means is that the Termination Date of insurance is not extended for another month in the insurance company’s records.)

        COBRA exists only for as long as you pay for it. In many circumstances, there is a grace period that allows you to pay and have coverage back-dated. (You pay Feb 5 for February’s insurance, and it moves the termination date from Jan 31 to Feb 28.)

        With cable/electric/gas, you receive services and THEN you pay. It’s the opposite in this case. If you have a pre-paid cell phone, you wouldn’t expect the company to provide service if you didn’t pay your bill, would you?

        • Straspey says:

          While your point is well taken – and thanks for clarifying the issue – that’s not always 100% true.

          At my wife’s company, former employees who go on their COBRA plan are protected against this type of disaster, and an underpaid bill – even of a few dollars – would not resut in an immediate cancellation of the policy.

          However – other employers handle their after-employment benefits differently, so the scenario you suggest does apply in some circumstances.

          • TheRedSeven says:

            I’m curious about this. It makes a good deal of sense for the (former) employees, but it seems like a logistical/compliance nightmare.

            If someone underpays (or doesn’t pay at all) does the company foot the bill for the difference? If so, I wasn’t aware that companies could pay for some/all of COBRA and remain in compliance.

            If they don’t pay the difference, are they forwarding information to the insurer indicating that the former employee HAS paid? If so, this strikes me as fraudulent, and might allow the insurer to drop coverage even if payment is eventually made…

            I want to know more…

            • Straspey says:

              Okay -

              My wife’s company provides an exceptionally generous COBRA plan to their former employees, and – here’s the critical difference – they manage the billing and payments themselves.

              In the case of the original article, the couple was having their COBRA plan MANAGED by Ceridian. In the case of my wife’s company, former employees send their payments directly to the benefits manager at the company, who then pays the bills – and will notify policy holders if and when their payments are late and/or erroneous.

              However – just like the cable or phone company – my wife’s company will not
              cancel a policy until they have made an attempt to contact the policy holder and give them the opportunity to work it out.

              I admit, that is going “above and beyond” – and ultimately the burden does rest on the policy holders to READ YOUR MAIL and PAY ATTENTION.

        • Pax says:

          “The difference is that COBRA insurance is a PRE PAID program. You pay in January for coverage in February.”

          That’s how my phone-and-ISP bill works, too. And if I skip a month, all I get is “Previous Balance / Balance Forward”. In fact, due to an accounting error on our part, exactly that happened … last April … and what we thought was a screwed-up Paperless Billing setup with Verizon, was just our own private screw-up. So, this month’s bill reads:

          Account Summary
          Previous Balance $65.41
          No Payment Received $.00
          Balance Forward $65.41

          New Charges
          Current Activity(View details) $65.40
          Taxes, Fees and Other Charges $3.64
          Other Providers(View details) $15.88
          Total New Charges Due by February 12, 2011 $84.92

          Amount Due $150.33
          These monthly charges are for your service from December 12 to January 11.
          $65.41 will be delinquent if not paid by 1/18.

          The error has persisted for this long, because the phone company never once even mentioned that we were perpetually 1 month behind in our bill. No shutoff notices, nothing. (We ponied up the whole $150-and-change, once we realised the error was ours, by the way.)

          • TheRedSeven says:

            Still, there’s a difference.

            In your situation, if you had neglected to pay April’s bill for $150, the ISP would have disconnected your service at some point in April. Then, since you received the services, they would send you a bill for the $150, or perhaps send your account to collections.

            In contrast, the health insurer doesn’t bother with collections. They have not provided any service to you, and any claims submitted after $cancellation_date are simply denied. If the situation was the same as yours, they would say, “Well, since you didn’t send a COBRA payment, we assume you no longer want the coverage and we will permanently affix your ‘End of Coverage’ date as MM/DD/YYYY.” No $150 in bills remain due, you simply receive only the coverage and service for which you paid.

            Frankly, I’m a bit surprised that your ISP doesn’t treat it the same way if it truly is a pre-paid plan.

    • Jean Naimard says:

      You’re an a$$.

    • Loias supports harsher punishments against corporations says:

      You’re an a$$.

      A computer should not terminate my coverage. A person should. So at the point where a person must review my case and the reason for the missing money, they would immediately see the problem and not terminate coverage. Like Jon Stewart says, to be a fucking person.

      • Jaynor says:

        HA! Ceridian is being employed to provide the payment processing and insurance update service in this case.

        If Ceridian had a policy that every cancelation required human intervention how quickly do you think their clients would ask what the additional cost is for that portion of the service?

        The individual-level scrutiny you’re talking about is expensive to implement for larger populations (like any fortune 500 company likely has). Nobody is going to do this.

        If you’re thinking “bla bla this needs a human touch bla” where are you thinking the client company is going to pull that from? Fat chance on profits so you’re left with employee pay or other compensation funds.

    • ParingKnife ("That's a kniwfe.") says:

      You’re an ass.

      Or was that a$$?

    • the Persistent Sound of Sensationalism says:

      You’re an a$$. And it’s ethics, not morals.

    • varro says:

      Calling you an a$$ is an insult to hard-working donkeys, our hard-working buttocks, and the end of digestive tracts.

    • TasteyCat says:

      Where I work, we’ll just credit the two cents if necessary, or failing that will just continue to show it as a past due balance, on which a finance charge can be assessed. It takes more time and effort to try to collect that money than to just write it off as a courtesy, and we don’t want to lose a customer over 2 cents.

    • obits3 says:

      If I remember right, a contract should not be rendered void due to a math error.

    • yessongs says:

      Yes you are an A$$

    • MattO says:

      like i said call me an ass….but this is how things work – you cant say “well $.02 is okay…” cause you need to draw the line somewhere…where would you draw it? the article states the member was notified several times and never responded….

      Again, if this were for a cable company, you guys would be blaming the op – cable company shuts off service becaue customer was $.02 behind and never paid it after several attempts to collect…

      you need to think of this objectively…forget the “it’s health insurance how dare you cancel coverage” – this is just how businesses work.

      • cytoman says:

        There-in lies the flaw in your argument. As you (the ass) stated “and never paid it after several attempts to collect”. The company, Ceridian, admitted they never notified the customer of the shortage, just cancelled the coverage because he was short. As a computer programmer, IT director, medical industry worker, prior Ceridian stickie and human being, I think this was handled poorly and I agree completely, you are an ASS.

        • George4478 says:

          RTFA. Ceridian said: “[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.”

          The article says that they did not PHONE the person, but they did contact them numerous times. this is very different than you claim that they “just cancelled the coverage because he was short”.

          • Mom says:

            Regardless of their statement to the press, it looks like they just sent the next bill, which was paid in full. But the $0.02 shortage wasn’t addressed, so they canceled the coverage. Theoretically, that may be multiple notices. In reality though, they just cut her off without notice. Over 2 cents.

            • dwtomek says:

              That’s what I was thinking. Besides which, with something like health insurance I think at least one phone call should be made before your policy is canceled. My cable company (since everyone seems to be equating health insurance to cable service) will most assuredly call me many a time to remind me of a delinquent balance before shutting off my service.
              The reason a call wasn’t made in this case is because that $.02 error was a jackpot for them. It gave them a chance to drop a huge hugely losing policy. Call me crazy but I would go so far as to guess that a policy holder who was in good health would have been called once before their policy was canceled over $.02.

            • Firethorn says:

              Which makes me wonder how the ‘past due’ amount was noted in the bill.

              I mean, most bills have ‘amount due’ in great big numbers, doesn’t it? Wouldn’t the logical thing be to include the 2 cents in that? Was it, or was it in some sub-field somewhere else in the bill?

            • Jaynor says:

              The shortfall is spelled out on the bill as account balance along with a nasty note informing you that your coverage will be canceled if you don’t address it. I’ve seen their forms.

        • MattO says:

          again, look at this from an objective point of view. if someone’s car was reposessed, or their cable shut off, EVERYONE here would be blaming the OP. the ONLY reason everyone thinks this is so horrible is because of the condition of the member, and the fact that it is health insurance coverage.

          if a company is contracted to provide a service for a set amount of money, and you pay less than that money, you have broken the contract – they can cancel the service. it is that simple.

          I agree it sucks….but that is just the way business works.

          Furthermore – “and [the insured] was provided several notices of the shortage and a grace period reminder notice on the last invoice” – the insured was provided several notices…if they attempted to collect several times, and they never then made that payment, I dont think it is the companies responsibility anymore.

          I know everyone looks at the insurance industry as the big bad company out to screw people…and in many ways they are – but you can put money on the fact that if you short a company of a payment, they contact you to make it up, you ignore them – this will happen.

          • WhoLikesPie? says:

            I guess that makes two asses then… I’m with you. Would that make us a drove? (herd of donkeys which are uncommonly refereed to as ‘ass’)

            Sure it sucks that they missed out on two cents… but it’s their own fault. Besides the company took measures to forgive once they were made light of the situation.

          • grumpygirl says:

            Yep, you hit the nail right on the head. You always need to deal with companies – especially insurance companies – on the assumption that they will look for the least little thing with which to screw you over.

            I’m glad they went to ABC and the insurance company was publicly embarrassed into reinstating the guy’s insurance. If there’s nothing legally/contractually wrong with what the insurance company did, then there’s certainly nothing wrong with going to the press about it.

      • skubisnack624 says:

        Your comparison to cable is certainly disproportionate. Whether one has cable does not affect one’s health. Your faulty comparison is not what makes you an ass.

        What makes you an ass is your acceptance of “how businesses work.” One of the reasons we find ourselves in the midst of the mortgage and health care crises is because it has become acceptable to do morally reprehensible things “in the name of business.” If you wouldn’t treat a human being like this, then why would it be alright for a company to do so?

      • edison234 says:

        Draw the line where it costs more to send the notice than what is owed. Because when you spend more on postage than what is owed then you are cutting into your profit. And that is how a business should work, you ASS.

        • MattO says:

          i dont disagree that this sucks….i dont disagree that it SHOULDNT be this way…the big difference between me and you, i UNDERSTAND this is how it is. yes it blows…no it SHOULDNT be this way, but it IS the way it is….people KNOW thats how businesses work – you cant plead ignorance here…people are well aware that if you pay less than a bill, services can be cut…

      • YokoOhNo says:

        I agree with this point too…in fact, if everyone deprived the shareholders of $.02 value then the good shareholders would be deprived of their value. it’s a slippery slop…$.02, $2.00, $200, $20,000, $2,000,000, $2,000,000,000,000,000 is the obvious end result.

    • Gorbachev says:

      There’s a whole bunch of wrong here.

      Automated billing systems with no manual review do things like this.

      It’s not good for anyone, the company or the customer.

      • WhoLikesPie? says:

        It’s actually great for the consumer on a day to day normal basis. Keeping everything automated and digital allows for the company managing your transactions to keep costs low and pass that on to you. Sure, there are going to be situations where things get screwed up but do you think that this automated system is less prone to error (which this was not) than a system of human review? Sure it sucks that they were short, and yes it was only two cents but don’t blame that on the company, they did nothing wrong. It was the customers fault for not noticing especially after receiving a reminder. I don’t want to sound heartless, but mistakes happen… why should that be the fault of the company? In the end they got their coverage back.

    • danic512 says:

      They were going to let someone die over two cents. What in the hell is wrong with you that someone’s life is worth that two cents?

    • kc2idf says:

      Okay, you’re an ass. You are correct, but you are still an ass. This response was grossly disproportionate.

      I don’t see an issue (computer programmer here, too) with building a tolerance into monetary calculations. Set a threshold, other than zero, which must be violated (either in one payment or cumulatively, or set up different thresholds for each) before cancellation kicks in.

      I would set three thresholds, myself:
      (a) individual payment is short by x% or
      (b) individual payment is short by $y or
      (c) cumulatively, payments are short by $z.

      (a) covers most short-term cases.
      (b) covers cases where the bill is for a small amount and makes the line a bit clearer
      (c) covers cases where someone tries to game the system by always paying just a little less than $y or x% short.

      It is especially important to do this given:
      (a) that some monetary computations resolve to sub-cent values and
      (b) that you may want to make room for floating point error (unless you can be 100% certain that everyone involved is using something like BigDecimal or its equivalent to avoid floating point error, in every class, in every package, on every system, everywhere).
      (c) that you want to accomodate human error and keep any response to it proportional.

      • Hooray4Zoidberg says:

        But that’s not how the development process works for any company of even moderate size. You could of course build a tolerance into the system, you can build anything into any system. But that’s up to the project owner to decide. Programmers aren’t the ones making business decisions like “Let’s let people be off by a few cents”.

        The design comes to the programming team with a rule that says if payment is delinquent 3 months cancel. Someone higher up has to realize this could be a problem and make a business decision to either say screw it, cancel them and let them call support, or allow them to be delinquent by x amount of dollars forever.

        Since we’re talking insurance companies who’s best interest financially is to get rid of people with pre-existing conditions, which choice do you think they’d make? Assuming of course anyone even had the foresight to predict this fringe use case.

        In regards to your comment about rounding errors, if you’re having floating point precision issues causing your math to be off by a greater than 1 cent you have a major bug in your system that need fixing. Building a threshold to allow for rounding errors is a hack at best.

        • kc2idf says:

          On your floating point . . . er . . . point:

          You only have control over your own systems. You don’t have control over those you interface with. If they have such a bug in their system, you both have a problem.

    • Pax says:

      Yes, you’re an ass.

      We’ve been short on my cable bill … on my phone bill … and when I had one, on my electric bill and gas bill, too. During the winter here in Massachusetts, back when heat wasn’t included in my rent, sometimes we had to let everyone fall a LITTLE bit behind each month, until warmer weather – when I could steadily catch up. I’d usually get completely paid back and up-to-date with the August payment. Then, in October or November, heating season would again be upon us, and we’d start having to pay $5 and $10 short on each and every bill, as the monthly total-across-all-utilities doubled, or worse!

      We never actually got shut off, either. Oh, sure, we got a few “impending shutoff (unless you pay up)” notices, but we always managed to do the (pay up) part.

      • Hooray4Zoidberg says:

        You didn’t get shut off because MA has laws against shutting off people’s heat and electric in the cold weather months when it’s a safety issue. I forget the dates off hand but it’s something like Nov-April. You’ll know when it’s up because you’ll see literally hundreds of Keyspan and NStar trucks driving around the first day that they’re allowed to shut off delinquent accounts.

        In fact they tricked me a few years ago into let one of them in our Dorchester 3 decker’s basement “to check the meters”. When the little worm got down there he whipped out a pipe wrench and shut off my downstairs neighbors gas and ran off before I even knew what just happened. The reason they were delinquent was due to billing error very similar to the one in this article.

    • Judah says:

      You’re an ass, or an a$$ if you prefer.

      Others have said already why.

    • Ichabod says:

      Call Me an asss but you are what is wrong with this country, why not leave?

    • YokoOhNo says:

      I must be one of the few who agrees with you…in fact, funny story. This guy stepped on the hem of my wife’s dress and not only did i take him out side and shoot him in the knee caps, I proceeded to decapitate the prick and then take an actual shit in his neck. I never thought that was possible but when this guy stepped on my wife’s hem I understood why people would do that!! it made me feel much better and he got what he deserved, no more, no less.

    • Papa Bear says:

      The computer may be the cause for the cancellation, but there is such a thing as being in technical compliance with the terms of a contract and virtually every court would have ruled the cancellation a reach of contract. Minor clerical errors of this sort are almost always resolved in the policy holders favor.

  3. Pepster says:

    Sounds simple enough – their computer system noticed that the payment remitted was less than the payment required to continue coverage, so coverage was canceled. A human looked at it eventually ad realized it was silly, but still, the bill needs to be paid in full for coverage to continue. It only says that like 15 times on the COBRA forms, so I give them little sympathy for missing it.

    For the number of times we’ve seen righteous indignation on this site when a corporation shorts a customer a pittance, its odd that we feel equally indignant when the corporations act the same way.

    • danic512 says:

      It’s someone’s life over two cents, why is this so difficult for you to understand?

      • WhoLikesPie? says:

        So, is the line 3 cents? 7? 18? 98? 1.58? 13.36? 20.00? 148.25? 328.68? Should everyone only pay a penny and then the company forgive? Yeah they’ll last long as a company.

        Where do you draw the line? If you’re that dependent on the coverage then maybe you should be reading your statement a little closer. Listen, no one want’s their coverage canceled over something so small % based. BUT that does not excuse the policy holder. It’s an automated world and there has to be a cut-off. There were ample notices AND the company, after hearing about what happened, reinstated their coverage. What more do you want?

        • Pepster says:

          EX-ACT-LY!

          The line, if you want to call it that, is the number in bold at the bottom of the statement.

          You want coverage: Pay that amount (or more)
          You want to lose coverage: PAY ANY AMOUNT LESS THAN THAT.

        • danic512 says:

          Why are you willing to let someone die over two pennies? Do you have no humanity?

          • WhoLikesPie? says:

            Nope, no humanity… mainly because the system is run via CODE on COMPUTERS which has nothing to do with humanity. There needs to be a cutoff and the cutoff is the amount due. Get off your high horse and realize that these people screwed up, even after notices were given. If they had died it would have been their own fault. Yes it’s sad and you don’t wish it on anyone, BUT that doesn’t excuse the fact that it’s their own fault.

            If you want you are more than welcome to go hold everyone’s hand while they write out a check or type the amount on their keyboard, although I doubt you have the time. Or would you like to pay everyone’s amount that they don’t pay? Sure it’s only 2 cents for these people… who cares right… well do that x thousands of customers monthly and we’ll see how long you last.

  4. GuyGuidoEyesSteveDaveâ„¢ says:

    So exactly how many notices were sent? How long did that $.02 remain outstanding? Did they pay off the $.02, and the interest was not enough to warrant a notice, but enough to flag them for termination? I mean, if the company sent 5 or 6 notices about it, then I don’t feel as bad, as they had the opportunity to tack on a few cents onto a bill to shut them up. But if they ignored the notices, then it’s tough to feel too much sympathy.

    • Southern says:

      And the kicker is that they probably paid several dollars in postage warning them about the “shortage”, all to recover 2¢.

      • Ichabod says:

        That’s assuming they tried to contact them over the 2 cents, most likely they saw an out and dropped them like a hot potato.

    • Straspey says:

      I think it may be prudent – especially in this particular case – to point out the important distinction between “ignore” and “overlook”.

      One is a conscious decision – while the other is an unfortunate (and possibly sloppy) mistake.

  5. markincleveland says:

    It’s think kind of stuff that makes the insurance industry look bad when in fact it was Ceridian, who cancelled the insurance. Ceridian is a HR outsource and payroll company who says they,
    “* can greatly reduce your risk for unexpected financial fees associated with non-compliance with human resources, payroll and tax regulations when you work with Ceridian.”

    enough said

    • e065702 says:

      Outsourcing a job does not mean absolving responsibility.

      “Sorry the engine fell off the wing of our plane your honor, but the deaths of those 150 people are not our fault because we outsourced it.”

  6. sirwired says:

    If, in fact, the patient was provided several notices of the shortage and they ignored them, then canceling the coverage was almost certainly done automatically by the computers, and not entirely unjustified. It’s nice that after the attention, the coverage was reviewed by a human and restored, but if I was Ceridian, I wouldn’t be apologizing to the original consumers either.

    • danic512 says:

      I too hate cancer patients that stiff me two whole pennies.

    • maruawe says:

      If the notices were sent by USPS they may still on the way to the insured man’s house . I just received a letter that was postmarked on the 12 of September 2004. The customer and I went round and round over this check. He said the check was sent on the 09 September 2004 and Now I owe him a steak dinner.
      I called him as soon as I received the check to set a date for the dinner. Just because they said it was sent does not mean they were received. Nuff said

  7. Kryndis says:

    I’m confused why the $.02 wasn’t simply tacked onto the next bill? Along with some sort of late fee of course, because god forbid we simply treat this sort of thing as a simple error instead of a profit opportunity.

    It says they paid their next invoice in full. If the $.02 had been on it — which seems to be pretty standard operating procedure for every sort of bill I’ve ever seen, but maybe not for COBRA coverage for some reason? — then this would have been avoided altogether.

    • coren says:

      Bingo.

      But cancer treatments are expensive. The cynic in me says that they didn’t do what you suggest for the reason of being able to drop coverage.

      • megafly says:

        Ceridian doesn’t pay for cancer treatment. They don’t pay for health insurance directly. They simply processed Cobra payments for this terminated employee.

    • ARP says:

      Yeah, if I short my cable bill, they don’t cut it off, they add it to the next bill and maintain my service. They said they gave repeated notices, but I’m trying to figure out how that worked.

    • InsertPithyNicknameHere says:

      Reading the original article, it says they paid their December payment in full but didn’t include the additional two cents (because it wasn’t clear to them that the amount was past due).
      So – the amount was underpaid (presumably in November). The shorted amount was added to the December bill, and that amount was again not paid. COBRA tends to be pretty strict when it comes to on-time payment, so being dropped after having an amount past-due for at least a month isn’t at all surprising.

  8. MrMagoo is usually sarcastic says:

    We were on Cobra a few years ago, and the insurance company was VERY strict about when and how the payment had to be made. They made it very clear that they would be more than happy to cancel our coverage if we made any mistakes. The HR dept. of the company I was getting layed off from gave us the same warning.

  9. Loias supports harsher punishments against corporations says:

    This article makes it very clear that health care reform needs to be halted and we need to trust health care providers implicitely.

    • varro says:

      And that public health insurance or health care, like in Canada, absolutely CAN NOT BE TRUSTED at all. Corporate health care knows better – they flagged this deadbeat for being two cents short on a payment – the Canadians might have let it go – those irresponsible hosers!

      • DeepHurting says:

        But, I heard on the radio that some Canadian guy had to wait to get his non-life threatening condition examined! THE HORROR!

    • Danny Boy says:

      Ok…you’re an a$$.

  10. HeyApples says:

    This type of story is always sensationalized in a way to paint the patient as the “victim” of the big bad corporation. It is refreshing to see the comments see through this slant/bias, and fall on the side of personal responsibility.

    I don’t think anyone wants to see people getting their health care coverage pulled. But equally important is seeing people following the rules, pay one’s bills, etc.

    If the payment was really life-or-death, you’d think they would double and triple check it, pre-pay for multiple months, overpay it, call a support rep… anything and everything to get it RIGHT.

    • ParingKnife ("That's a kniwfe.") says:

      Right, the real victim here is Ceridian. Without those two cents, how do we expect them to put food on their families?

    • wonderkitty now has two dogs says:

      When paying a bill that cost over $300, I would probably miss the final digit after making sure the first four were correct… the 3-2-8.6- yeah we got it.

      .02¢. I realize there’s a line- and like a dozen other people I have to ask why it became such an issue. Or why a phone call wasn’t made if it was so important.

    • danic512 says:

      Yes, it’s only right to cut someone off of cancer treatments for two pennies.

      How in the heck do you sleep at night?

    • YokoOhNo says:

      Is that you Bill Frist? Been a long time since you “adopted” kittens just so you could kill them and dissect them!

  11. TheRedSeven says:

    Pardon the length of this, but it may help explain both Ceridian’s process and COBRA in general out there.

    I was a benefits rep at a company that outsources health benefits for major corporations in the US. The enrollment process for COBRA often resulted in the most frustrated customers.

    Unlike your health insurance when you’re employed, COBRA assumes that you have no coverage–UNLESS you pay in advance. So, when a bill is sent out on January 1 with a due date of January 15, it is for the period from February 1-28. There’s a grace period, usually from January 15-February 15. However, if no payment is received by February 1, the coverage shows an END DATE of January 31. Once payment is received, the coverage end date is extended to Feb 28.

    Lather. Rinse. Repeat.

    What COBRA participants often don’t realize is that this is essentially a Pre-Paid service. Without exception, the end date is NOT extended until payment is received. Depending on the company handling it, there might be a little bit of wiggle room as to when a payment can still be accepted, but the insurance company never considers the person covered until a payment is received.

    This is unlike any post-paid services (cell phone, electricity, water) where you receive the services and THEN have to pay. You simply don’t get the insurance until AFTER you’ve paid. It can be back-dated if you’re within a grace period, but people often don’t realize that if you’re past that grace period or don’t pay your full bill, you’re in very strong danger of losing your coverage–with no way to get it reinstated.

    When I worked benefits, we had a very similar situation to the OP. From one calendar year to the next, the cost of the insurance went up about $.02, and the participant didn’t notice (I think it was a 6 changing to an 8). Well, when it happened the first month, nothing happened, since the computer figured they were paying for all but one day of coverage (Jan 1-Jan 30, but not Jan 31). The bill went out the next month indicating that coverage had been terminated effective Feb 1, but that with a payment of $.02, Jan 31 would be covered as well.

    The person–who had never been even close to late with a payment–was understandably upset. It took a bunch of back-end work, including several conference calls with muckety-mucks from both our company and our client’s VP of Human Resources to get the exception approved, coverage applied, and update the insurance company.

    In the meantime, we had to ask the participant to send in another check for February (and then again for March), in *hopes* that the coverage would be approved and back-dated. No guarantees. Obviously, they were skeptical of doing this, since a significant chunk of money would be going out the door with no guarantee that they’d get anything for it (and the refund process was horribly broken, and would probably take about 2 months…)

    It ended up all right, but it was a headache for everyone involved. Probably most of all for the person who thought they didn’t have health insurance.

    • ShruggingGalt says:

      Agreed.

      Also, your rights under COBRA coverage are outlined by Federal law. You know, the people who know how to solve all of our problems, and can fix things quickly, right?

      I’m sure she could have won after filing a complaint, but it would take 12-18 months to be resolved.

  12. cybrczch says:

    Another reason to check your bank statements on a regular basis.

  13. unsmith says:

    This is exactly why health insurance should NOT be a for-profit business.

    Universal health care now, please. And not the Obamacare crap. Do it right.

    • danic512 says:

      Seriously, at the very least a public option if not full on single payer.

    • JulesNoctambule says:

      Since you seem to have the answers, please go into detail about how it’s done ‘right’, and how to prevent those who oppose so-called ‘socialism’ from gutting any measure that actually protects and benefits the citizens. I’m sure the President will be grateful to hear from someone as clever as you!

  14. TasteyCat says:

    Well, at least healthcare reform will fix all our woes.

    After being shamed into doing so, they did the right thing. Too bad they are neither “taking it seriously” nor taking steps to make sure it doesn’t happen again, so any fix they have implemented seems just like a one off that really has no impact.

  15. yessongs says:

    Insurance companies will look for any way they can to cancel coverage from someone who is actively using the benefits. they want the income but hate to pay out claims.

    • msbask says:

      Normally, I might agree with you, but not in this case.

      Yes, in this case, it was an insurance company who pulled the plug, but these people were paying for a service and shorted the payment. The power company would have shut them off, their credit card would have gone into default, their car loan company might have repossessed… all for the same 2¢.

      (They’d all be wrong for penalizing someone for the 2¢, but that’s a whole different argument.)

  16. maruawe says:

    This is very typical of the insurance industry.. I can image what it will be like under obama care, If all aspects of this government take over is implemented. God help us all, because we will need all the help we can get……….

    • Eli the Ice Man says:

      It will be better. Every industrialized nation but your’s has government health care and, ironically, our governments all pay less for it than your government does in a system that your government alledgely is “not involved” in.

      I lived in the US for 6 months. After reading about US healthcare and comparing it to my own, I’m sorry to say, but your current system is a complete joke.

  17. Jaynor says:

    I work for one of Ceridian’s competitors. Our clients generally set threshholds at which coverage is “canceled” (though if your account is not paid in full your claims will be pended with the insurance companies until full payment is received).

    I wouldn’t blame Ceridian in this instance. This is likely a requirement of the client for whom they’re administering the COBRA.

    And yeah… apologize for what exactly? Ceridian’s customer is NOT the COBRA payer, it’s the organization (likely a former employer) that they’re administering COBRA plans for. All their fees come from that organization, not the check they’re receiving from this plan participant.

  18. george69 says:

    and the yanks still want to keep their crappy health insurance system.

    /for a small fee Canada will come down and fix it for ya :)

  19. sumocat says:

    Why should they apologize? Ceridian is a soulless, amoral corporation incapable of expressing human empathy without outside intervention. Sure, corporations share our right to freedom of expression, but the Supreme Court never ruled that they should exercise that ability when appropriate.

    • Jaynor says:

      But in this case they’re abiding by plan rules set by a client. They likely don’t have the lattitude within their contract to make an exception like this.

  20. sjb says:

    People here seem to think that COBRA is a insurance company – it is not a insurance company, but a set of rules imposed on them to allow continuation of a companies group health coverage.

    http://www.dol.gov/ebsa/faqs/faq_consumer_cobra.HTML

    I used this to keep my group health while between jobs and have first hand dealings with it, its a very inflexible system with strict rules that must be watched. One of the ways for you to terminate your coverage is to just stop paying; Its in the rules as one of the method for termination.

  21. tsdguy says:

    Moronic. Even the IRS and state tax agencies (in PA specifically) allow you to round your calculations to the nearest dollar and they don’t accept or want payments less than $1. No company for any reason should have the slightest issue or problem with any payment that is within a rounding error (49 cents).

  22. VihoDia says:

    There is a line between an amoral for-profit business like the private US-health insurance industry which kick people from service for the smallest of reasons, when compared to Hospitals emergency rooms which must practice the moral need to service all life/death patient’s regardless of their ability to pay. This isn’t about .02 cents its about the industry that always cutting their losses and keeping their share holders interest as a top priority. What if this person had not paid at all because they couldn’t afford the insurance? There wouldn’t have been so much as a tear when they cut them off from treatment. Its confusing for a capitalistic society to rectify that all aspects of life cant be trusted to business.

  23. Eli the Ice Man says:

    Stories like these make it make that much more sense to protest health care reform in the United States!

  24. valued_customer says:

    This reminds me of the BS I went through with my car insurance last year. I honestly forgot to make a payment one month, and since I am terrible at opening all my mail, the policy got cancelled. However, the website was happy to take the following month’s payment, and never showed an overdue balance or policy warning. I also did not receive an email alert, phone call, or pending termination letter. A single sentence on the bill would have been my only notification. My fault yes, but life gets busy and holy crap.
    Since we are required *BY LAW* to have car insurance, and health insurance is not what I would call optional, why is it so hard to notify customers in these cases? If you can program computers to cancel policies, you can make them robodial and email and even send texts. Listen insurance people: Customers REALLY REALLY want to keep their coverage, so give them a chance to pay you when they screw up.

  25. crb042 says:

    Why doesn’t 2 cents of the next month payment finish off the first month, and then the next month is 2 cents short? That way they’re never more than one month off. That would make sense – which is obviously why they compound the interest on the initial 2 cents as many times as they can.

  26. Press1forDialTone says:

    With grace and humanity.
    Evil bastards.
    Turn those regulatory screws tighter and tighter and tighter until
    the health insurance companies truly yell Uncle when they act like
    this.
    ObamaCare destroy the evil ones!!

  27. DeepHurting says:

    Whenever I read a news story about COBRA, I can’t help but read it in my head using the voice of Chris Collins, aka. Cobra Commander.
    “COBRA!!”

  28. psm321 says:

    I remember having lots of trouble working with my ex-employer’s COBRA provider and getting different billed amounts, etc. I spent many hours on the phone with them, and ended up loaning them free money for quite a while just to be on the safe side. To be fair, it was around the time the stimulus subsidies were going into effect, but it took them way too long to handle

  29. e065702 says:

    If the amount was short, thereby resulting in cancelling their coverage, did the bank refund the money? They should have, they were no longer providing a service.
    For some reason I doubt it.

  30. Robertinark says:

    His insurance has been re-instated by the company.

  31. Kingsley says:

    2 cents, they would have canceled them for 1 cent, too. It’s obscene. This is OK with some readers here, i guess, until it happens to them.

    “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”

    They have an army of lobbyists in DC. Shame on them.

  32. JakeChance says:

    Unfortunately they’re not wrong to have done what they did. However, they should have someone simply review all sorts of odd payments or payments that aren’t in full. Most people ARE going to pay in full and those that don’t usually will either not pay or pay some sort of increment of $50. They should just filter all shortages to one person or even filter it through a computer first with some of the conditions* I mentioned and have that person pass a couple of odd cases like this one to customer service who could take some time out of fielding calls to check up and not have these cases happen in the first place.

    *They’d probably have a lot more data on the normal kinds of shortages so they’d be in a great position to easily have a computer picking out very odd shortages like this one.

  33. catastrophegirl chooses not to fly says:

    got to wonder how the next bill didn’t include this. i once slightly underpaid my water bill in error and the they just added it onto the next bill, which said something like:
    “previous total $18.97. previous payment $18.91. current charges $19.26. total due $19.32″

  34. ericfate says:

    So, what did the Health Care Act change regarding this scenario? Anyone know? Of course not, because it is easier to bitch and moan and complain about Obamacare than actually read up on anything that it does.
    http://www.healthcare.gov/law/provisions/Curbing%20Insurance%20Cancellations/cancellations.html

    An insurance company can now only drop (rescind) you for two reasons:
    1) You lie on your application and the insurance company can prove that it wasn’t an accident.
    2) You don’t pay your bill in full.

    As an added bonus, the insurance company is no longer allowed to drop you without first giving you 30 days notice.

    In California there is an additional catch. There is an assembly bill on the books which requires health insurance companies to continue to pay any claims that would have been valid, even if the member has been canceled, so long as the hospital can prove that they provided the services in good faith (meaning the coverage ‘was’ in effect at the time they obtained authorization for the service and admitted the patient — and then the patient was retroactively dropped from the coverage due to either of the acts listed above.)

    So instead of this guy getting retroactively dropped because he forgot a penny, he got dropped because he ignored MULTIPLE notices telling him that he still owed additional money over the course of the next month, and then he still got an additional grace period in which to get it all sorted out before it got turned over to the department of bureaucratic hell. And this wasn’t somebody who was too sick or too broke to respond, it was someone who was either unwilling or unable to read his mail or check his math.

    Seriously.

    And if you have a plan of this sort where you need to pay as you go to maintain coverage, reinstatement isn’t that hard. You make a phone call, wade through call tree hell, make a restitution payment, and eventually you get reinstated depending how bad the backlog is ahead of you (large, because people are never actually keen on paying the bill when they aren’t actually sick and in need of the service). The only difference here is, the Ceridian guy is the one who gets to wade through call tree hell.

    How should they have handled it, exactly the way they did. And next time around, they should push harder to convince the member to use the Auto Pay system rather than doing manual payments.

  35. AnthonyC says:

    While morally reprehensible, I think it was quite a rational decision on the company’s part. As was the decision to reinstate coverage upon later review. Just my 2 cents.

  36. moderndemagogue says:

    These guys got super lucky.

    They violated the contract and there’s no legal recourse for them in that situation. Good think Ceridian decided to let it slide.

    Consumerist, do you not worry about getting sued for some form of misrepresentation given that the person doesn’t actually didn’t end up losing their coverage?

  37. Papa Bear says:

    The insurance company new it was wrong to cancel. This was a minor, no, very minor, clerical error, and as such it was not grounds for terminating a contract. The policy holder was in technical compliance and any court in the land would have ruled in their favor in a breach of contract suit. On the other hand, if multiple notices were indeed sent, which I highly doubt, then the insurer may have had a leg to stand on, albeit a weak one.