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Practice Management > Building Your Business > Young Professionals

Former CO-OP enrollee: Expose officers, directors to suits

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A former Health Republic Insurance of New York (HRINY) enrollee is trying to change the terms of the Health Republic liquidation proceedings.

David Young, a lawyer in West Babylon, New York, has filed an objection to a proposed HRINY liquidation order filed by Maria Vullo, the acting superintendent of the New York State Department of Financial Services.

HRINY was one of the nonprofit, member-owned carriers started with Patient Protection and Affordable Care Act of 2010 (PPACA) Consumer Operated and Oriented Plan (CO-OP) loans. Enrollment grew quickly, but the CO-OP charged low premiums and ended up suffering heavy losses, especially after a major PPACA carrier risk management program, the PPACA risk corridors program, paid only 13 percent of what carriers were expecting the program to pay. Regulators suspended the operations of the CO-OP Nov. 30, 2014, and required enrollees to get replacement coverage for December.

A New York state judge has scheduled a hearing on the proposed order for May 10 in New York City.

See also: New York starts official Health Republic liquidation proceedings

Young says HRINY owes him at least $5,200 in reimbursement for care he paid for out of his own pocket. He sued the carrier in small claims court.

The proposed liquidation order would create an injunction barring claims outside the liquidation process against HRINY, the New York Department of Financial Services, other public officials, or “any of their respective officers, employees, attorneys, or agents or any directors, officers, employees, attorneys, representatives of HRINY,” Young says in his objection.

The state liquidation statute itself simply calls for the liquidation process to prevent levies against a failed insurer and its assets, Young says.

There is no reason to bar civil claims against the New York department, HRINY directors, officers, or HRINY employees, attorneys or representatives, Young says.

HRINY, HRINY’s officers, HRINY’s directors are in an unusual situation, because HRINY continued to solicit enrollees’ premiums for November in October, when the company was facing severe financial problems and managers knew the company was likely to be shut down, Young says.

“The cause of this liquidation is by no means just bad luck or bad business,” Young says.

The New York attorney general, who is representing Vullo, and Vullo, “have offered no statutory basis why such a broad immunity should be granted in such a high stakes and controversial matter,” Vullo says.

Representatives from the New York Attorney General’s Office and Vullo’s office were not immediately available to comment on Young’s objections.

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