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Company threatens to cancel health insurance

By Moneth Deposa

SAIPAN, CNMI (Saipan Tribune, July 9, 2009) - Aetna Global Benefits, which administers the CNMI government’s health insurance program, has threatened to cancel the health insurance coverage of members if a two-year-old debt to the company is not paid soon.

NMI Retirement Fund board chair Juan T. Guerrero disclosed this to Saipan Tribune, describing the issue as "very critical" to the interest of all government employees and retirees who are members of the Aetna plan.

"Our problem with Aetna is we have runoff obligations that have not been paid and in theory, they have used their line of credit to pay these obligations for the providers. Because of this unpaid obligation, they told us that if we don’t pay them they will cancel the health coverage of our government employees and retirees," Guerrero said.

According to Fund administrator Mark A. Aguon, approximately US$122,600 has not been paid to Aetna for its services as third-party administrator for two years.

"It’s the money we owe Aetna for services they did for us between 2006 and 2007, so it’s way past due," he told Saipan Tribune.

Aguon said the obligation was incurred before Aetna became the Fund’s insurance carrier.

"We owe that money and we need to pay. We have a very good working relationship with Aetna as our health insurance carrier and we don’t want to jeopardize that relationship by something that is past due for three years," Aguon said.

The Group Health and Life Insurance Fund acquired the services of Aetna in July 2006 as its third party administrator. Service fees paid by GHLI to Aetna is at US$32.29 per member per month.

The group health insurance plan was privatized on Nov. 1, 2007. Premiums paid by government and the subscribers are remitted to the GHLI Trust Fund which then remits all contributions to Aetna after deducting 1 percent surcharge.

Saipan Tribune learned that there is a pending bill at the Governor’s Office that would address the problem with Aetna.

House Bill 16-262 appropriated a total of US$122,630 for the payment of runoff claims incurred by members of the Commonwealth government health insurance program with Aetna.

This appropriation is part of the US$295,000 allocated by the bill for several purposes and funding is supposed to come from the excess interest payment from the Marianas Public Land Trust.

Offered by Rep. Ray Yumul, the legislation was passed last June 30.

"The Legislature finds that using the excess MPLT interest payments to pay runoff claims that were incurred by members of the CNMI Government Group Health Insurance is an appropriate use of this public resource and will prevent the possible loss of insurance coverage for government employees," Yumul’s bill stated.

Fund administrator Aguon is optimistic that Gov. Benigno R. Fitial will soon act to address this problem with the insurance carrier.

Based on the recently released annual audit reports for 2007 and 2008, the third-party administrator fees paid for the years ending Sept. 31, 2008 and 2007 were US$109,560 and US$1.282 million, respectively.

The surcharge on health insurance premiums for the year ending September 2008 was US$118,723 while health insurance premiums paid to Aetna for the same year was US$11.7 million.

Of the US$11.7 million, US$1.9 million was unremitted as of September 2008 and is recorded as medical premiums.

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