Group Insurance Is Temporary

Group Insurance is good if you remain an employee of the Organization (that purchased the group insurance). Once you are no longer an employee (for whatever reason), you (and family members) will no longer be eligible for protection. Many people covered under group insurance may not be eligible to apply for new policy due to age, illnesses and other adverse underwriting factors.

A man seeking treatment for a life-threatening illness had his health further jeopardized when his employer and health insurance company tried to cancel his coverage over a 26-cent dispute. The New Jersey Star-Ledger reports that in January, 33-year-old Sergio Branco was diagnosed with acute myelogenous leukemia. Left untreated, the illness can be fatal.

When the truck driver took time off work to seek treatment under the Family and Medical Leave Act, he was told that treatment for the leukemia required a bone-marrow transplant that would cost about $500,000, even with insurance.

To make matters worse, when Branco returned to work after his federally guaranteed leave time, he was promptly laid off. Branco and his family weren’t worried, because they knew he was eligible for extended coverage under the government’s COBRA program.

The family also launched a fundraising site for Branco’s leukemia treatments. The monthly fee for Branco’s COBRA insurance is $518.26. When his wife sent in the first payment, she erroneously made out the check for $518, forgetting to add the 26 cents.

Thus began an extended feud among the family, Branco's former employer Russell Reid, the insurance company handling his COBRA and even the Department of Labor.

Paychex, the company handling the COBRA payments, cashed the check but did not notify the Branco family of the payment error. In the middle of Branco’s treatment, he was informed by the hospital that he didn’t have insurance.

"They’re playing with my husband’s life," Mara Branco told the Star-Ledger.

Technically, the payment was still not due. So the Brancos offered to make up the difference, but they were told that his former employer had instructed Paychex to not accept any further payments — meaning that his COBRA insurance would be cancelled.

"The whole time he said Paychex is giving me false information," Mara Branco told the Star-Ledger after she contacted Branco’s former employer. "I told him if he’d just make a phone call everything would be all right. He said he’d see what he could do."

Branco’s wife even enlisted the help of the Department of Labor, whose representatives made four calls to her husband’s former employer.

Eventually, the family hired a lawyer and Branco’s physician got involved, sending a letter pleading for Branco to be added back onto his COBRA plan. Branco “will most certainly die in the very near future if he does not proceed to transplant; therefore I am writing to request that every effort be made to reinstate his health care insurance coverage," the doctor wrote.

"They know he’s literally in a life and death situation and for 26 cents, they’re denying him the right to get the health insurance coverage he needs," attorney Jeffrey Resnick told the Star-Ledger.
It took several months, but on Aug. 9, the parties involved finally agreed to put Blanco back on the COBRA coverage. Blanco’s surgery is now scheduled to take place on Friday.

"The Department of Labor said the company will reinstate him from May 'til now," Mara Branco told the paper. "They said the company did it wrong. I am super happy. It’s like a weight has lifted off my shoulder. It’s better than winning the lottery."