CdA company scrutinized on ‘Primetime’

ABC’s “Primetime Thursday” will feature a segment this evening on ePEO Link, a Coeur d’Alene company that is allegedly behind on $3 million in medical claims to clients in seven states.

ePEO Link provides payroll services, health insurance and other benefits to nearly 300 small businesses. In 2002, the firm’s self-funded health insurance plan fell behind on payments of medical claims to health care providers. In Idaho, the company defaulted on $78,000 in medical claims, according to a suit filed by the state.

“They have an insolvent health benefit plan,” said Dale Freeman, supervisor of consumer affairs for the Idaho Department of Insurance.

The state is seeking to take control of ePEO Link through receivership, with the goal of recovering assets to pay off the medical bills, Freeman said.

The “Primetime” report airs at 10 p.m. The coverage of ePEO Link is part of a report on the industry of professional employer organizations. According to ABC officials, the industry promises small businesses cost savings on health insurance, payroll and other services. But since professional employer organizations aren’t regulated by state insurance authorities, customers have little or no recourse when they fail to pay medical claims, ABC officials said.

In a letter to ABC, ePEO Link’s attorney said remedying the outstanding medical claims is a top priority for the company.

The troubles arose when the plan received an unusually high number of catastrophic claims, said company attorney Tamsen Leachman. In addition, two outside insurance carriers became insolvent, Leachman said. ePEO Link had purchased reinsurance through the two companies to pay its high-dollar claims.

The company voluntarily terminated the plan in June 2002. Employees in the program were moved into other health plans, the letter said.