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December 15th, 2008

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11:47 am - The Best Christmas Present Ever: Part II
[Continued from here.]

The company we work for, as with many others, has been having some tough times financially lately. Not surprising, what with the economic downturn and all, but still somewhat stressful, particularly to the company management whose job it is to figure out how to keep the company going. So, of course, they've been looking for ways to cut costs during this whole recession thing.

One way they found was to outsource our employee medical, dental, and payroll administration to what's called a "Professional Employer Organization," or "PEO." Basically, the PEO hires all your employees away from you, then "leases" them back to work for you. The amount of the "lease" pays for the insurance premiums, payroll, and a little sum left over to the PEO for handling all the paperwork.

"Sounds like a lot of hassle," I hear you cry. "Why would you bother?"

Well, it's like this. Say you've got a company with 20 employees. You are, to put it mildly, going to be screwed (without, I might add, so much as a kiss) by the insurance companies when you try to offer your employees medical coverage. However, if you're a company with 500 employees, the insurance companies will at least bring some Astroglide and maybe even offer to call you later. Since everyone at your company (and several other companies) officially work for the PEO, the PEO has a lot more employees and can negotiate much smaller rates for much better coverage than the small company could on its own.

In short, going to the PEO would not only save the company a lot of money, but would also enable them to save their employees some money and offer them a bigger choice of programs than they were before. It was a no-brainer.

Now, there's a law in this State that when an employer switches from one insurance plan to another, the insurance company must cover all employees just as they did before the switch. In other words, they can't call anything a "pre-existing condition" if it was being covered before the switch. Everyone figured this kind of switch would qualify under that law.

But you see, insurance companies LOVE "pre-existing conditions," because they do not have to pay for treatment for them. And if there's any way possible that they can call anything a "pre-existing condition," well, it's a bit like, (to paraphrase the inimitable Spudnuts) "steak-knife in the EYE. Legal-law style."

The whole PEO thing is kind of a loophole which allows more small businesses to offer medical benefits to their employees. Unfortunately, some people did some checking and discovered that, in fact, there's another loophole. Since we were all switching employers, and not just insurance plans, the insurance company didn't have to cover anything that had been diagnosed in the last year if the employee in question hadn't had continuous coverage for the last year.

Guess who didn't have continuous coverage for the last year, being that he had just qualified for our health plan? Yup. Jim. Guess who's just been diagnosed with a life-threatening condition requiring very expensive treatment, and whose condition was about to be called "pre-existing" and not covered? That's right. Same guy.

I don't even like to talk about what happened when Jim got this news. The way it sounded to him was like, "Yes, we know you just got medical coverage in time to be diagnosed with cancer, but looks like you're going to lose it come January first. Have a nice day."

And it hit him pretty hard.

(To be continued ...here.)

(10 comments | Leave a comment)


[User Picture]
Date:December 15th, 2008 09:14 pm (UTC)
there absolutely has to be a way Jim can fight that. a lawyer will be less expensive than cancer treatment. insurance companies try to pull a lot of shit that is NOT legal.
[User Picture]
Date:December 15th, 2008 09:41 pm (UTC)

Well, the problem with lawyers is that they want money. (I looked for a pro-bono one.) And he's not able to work full time because he's sick, so he's barely able to pay his rent and co-pays, let alone an attorney retainer. Sure, cancer treatment may be more expensive than an attorney, but the difference is that you can usually get people to treat you with a promise to pay later, whereas you can't get a lawyer by that method.

There's also the small problem that the insurance company appears to be within the letter of the law here in this State (and Federally as well).

The story does continue, but you're getting a feel for how all of us have been feeling the last several weeks. I.e. absolutely outraged that something like this can happen.
[User Picture]
Date:December 15th, 2008 09:45 pm (UTC)
Good gods almighty... things are THAT bad for "The Company"? Criminy.
[User Picture]
Date:December 15th, 2008 09:52 pm (UTC)
It's not that things are that bad, really: I mean, yeah, times are tough, but the PEO thing doesn't strike me as any kind of desperation measure. In fact, this is being done by a lot of small to medium businesses so that they can get better, cheaper plans than they could alone. In our case, we (the employees) would get lower deductibles and lower premiums, plus a couple of different kinds of plans, where without the PEO we'd be sort of stuck with what we could negotiate.

Like I say, PEO's exploit a loophole that allows smaller businesses to get better benefits for their employees, and it's usually a win-win situation. Employees get better, cheaper benefits, the PEO gets paid, and the company saves money. It's actually probably something that should/could have been done a long time ago. We were all fairly excited about it when it was announced/explained at first because it wouldn't just save the company money but any full time employees also.

But where there's a loophole, there may be another one. Actually, the PEO folks didn't even know the insurance company could do this -- it's never come up with any of the companies (and hundreds of employees) they do business with.

Trust the insurance companies. Oh, and speaking of insurance companies, it gets even better when you find out who they are (the old one and the new one).
[User Picture]
Date:December 15th, 2008 09:55 pm (UTC)
OH, lemme guess- the same one we got the Shirts for when they decided to triple our premiums?
[User Picture]
Date:December 15th, 2008 09:58 pm (UTC)

Hm. Was that Principal? I don't remember shirts...
[User Picture]
Date:December 15th, 2008 10:13 pm (UTC)
YES, the black shirts with the poor sap on the front with a giant screw through his chest. It said "I got screwed, it's the PRINCIPAL of the thing" or something like that.
[User Picture]
Date:December 15th, 2008 10:45 pm (UTC)
LMAO!!! Oh, man, no, I didn't even hear about that, but it is so apt.


Yeah, Principal didn't bring Astroglide -- they brought sandpaper and rock salt.
[User Picture]
Date:December 15th, 2008 11:54 pm (UTC)
Oh ye gods, I thought you were THERE for that particular "Company meeting", heck- it was before they told me and the others that they were, "Growing in a new direction, and you can't grow with us." ....
Hmph, ah well- if you want one of those shirts- I think I still have mine. You want?
[User Picture]
Date:December 16th, 2008 12:24 am (UTC)
Insurance companies are the ones who started the nasty rumor that Canada's health care system is teh ebil, right? I am so grateful to be living in a place where health care is available to everyone. It's not perfect, but when I read stuff like this....daaaaamn!

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