Over 100 CIGNA Administered Self-insured ERISA Health Plans Sued for Embezzlement-Health Plan Litigation Tsunami
This article highlights some major concerns in the Healthcare Industry. Let’s break it down. Alleged embezzlement by the major insurance company highlighted in the article from 100’s of self-insured companies. These are major companies including: JP Morgan Chase, Macy’s, etc., employing hundreds of thousands of people, that have been allegedly embezzled from. From an underwriting perspective, the allegedly embezzled claims that went through these plans ultimately lead to higher rates on premiums for the companies, as well as higher premiums for employees.
“Most troubling are accusations that the Plans, even after being alerted to these potentially illegal practices and despite formal complaints being lodged with the DOL, astonishingly continued to delegate and authorize Cigna, to investigate its own alleged wrongdoing!”
Why is that important? From an employee perspective now, look at the value of an annual raise. In industries with low margins, a good employee raise might be a small percentage of their annual salary. The value of the raise is immediately shot out of the window if the premiums and cost of healthcare are more than the actual raise. That is why it is so important to make sure the second biggest expense behind payroll, for most companies, is managed correctly and with good integrity.
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