Newark, N.J.-based telecom firm's collapse leaves some unpaid medical bills.

Publication: The Record (Hackensack, New Jersey) (via Knight-Ridder/Tribune Business News)

Bookmark this article Print this article Link to this article Email this article Digg It! Add to del.icio.us RSS

COPYRIGHT 2004 The Record

Byline: Martha McKay

Nov. 22--Banks, federal investigators, small businesses, large phone companies -- everyone is after NorVergence for its alleged misdeeds.

Now comes word the company closed its doors owing hospitals and doctors $1.5 million, money that bankrupt NorVergence Inc. should have paid on behalf of its employees.

While that pales next to the tens of millions lost by corporations that did business with the Newark-based telecommunications reseller, those unpaid bills have taken a human toll.

Scores of former NorVergence employees such as Sandy Muro discovered recently that NorVergence's self-insured health plan was as unreliable as their former employer.

Those workers now face whopping doctors' bills for medical visits made while they believed they were fully insured.

Adding to their bitterness, the workers point out that they contributed part of their salaries every month to pay for the insurance.

As it turns out, NorVergence failed to pay any medical claims for three months leading up to its July bankruptcy filing, and questions remain as to what the company paid prior to that, according to Charles Forman, the NorVergence bankruptcy trustee.

For at least several months, Forman said, "It appears that the [employee contributions] were used for purposes other than paying health claims." He could not provide details about how the company spent the money other than to say, "Business obligations."

Federal law governs companies that self-insure. Running a health plan improperly -- including using employee contributions for...

Read the full article for free courtesy of your local library.