Employees of Pineville Community Hospital filed a class-action complaint against the hospital, its operator and others alleging money deducted from their paychecks to fund their health plan was used for other purposes, according to Law360.
Beginning in 2013, Pineville Community Hospital employees were covered by health insurance plans offered by Anthem. However, Anthem canceled the administrative services agreement with the hospital after several months of nonpayment, according to the complaint.
From March 2, 2017, through April 12, 2018, the hospital or its operator withheld health plan contributions from employees' paychecks and allegedly failed to remit the funds to Anthem.
"The choice by the defendants to continue withholding funds from participants' paychecks without paying the amounts owed to Anthem was a breach of the most fundamental of the defendants' fiduciary duties owed to the plan participants," the complaint states.
The employees allege they suffered damages as a result of the health plan being canceled and are suing the hospital for breach of fiduciary duties under the Employee Retirement Income Security Act.
"As a direct result of this breach, the plaintiff participants lost their healthcare coverage costing plaintiffs and the class millions of dollars in healthcare bills" the complaint states.
The three plaintiffs filed the lawsuit on behalf of themselves and all participants and beneficiaries of the hospital's healthcare plan in 2017 and 2018. They're seeking an award of compensatory and punitive damages, in addition to attorney's fees and costs.
Pineville Community Hospital, now called Southeastern Kentucky Medical Center, was owned and operated by the Pineville Community Hospital Association until two years ago. In 2017, the hospital association entered into an agreement with Fort Lauderdale, Fla.-based Americore Health. PCHA still owns the hospital real estate, but it entered a long-term lease deal and sold non-real estate assets to Americore.
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