Class action certification requested in Crittenden Regional Hospital lawsuit; now more than 100 plaintiffs | Arkansas Blog

Tuesday, September 16, 2014

Class action certification requested in Crittenden Regional Hospital lawsuit; now more than 100 plaintiffs

Posted By on Tue, Sep 16, 2014 at 5:52 PM

The number of plaintiffs involved in a lawsuit over the alleged failure of Crittenden Regional Hospital to pay for employees’ health insurance claims is growing. Attorney Denny Sumpter asked the Circuit Court of Crittenden County on Friday to certify the lawsuit as a class action. You can see the plaintiffs’

For our initial summary of the lawsuit, see here. The plaintiffs allege that CRH, which closed its doors a week ago and filed for Chapter 7 bankruptcy Friday evening, withheld money from employees' paychecks for health insurance premiums, but never actually paid the claims. That would potentially leave their employees on the hook for tens of thousands of dollars in medical care they were told was covered by their health insurance. 

The filing on Friday listed 96 plaintiffs; Sumpter said today they’re at around 125 (“and counting,” he said). CRH had around 400 employees in total, though Sumpter said he did not know how many of them were paying for CRH health insurance. The suit alleges that the failure to pay claims extends back at least to 2013 and estimates that the total number of individuals participating in the plan at some point during the time frame is between 400 and 600. 

CRH was self-insured (governed by the Employee Retirement Income Security Act of 1974, or ERISA, and regulated by the federal Department of Labor), using a third party (CIGNA, one of the named defendants in the lawsuit) to administer the health insurance plans to employees. Sumpter said that he knew that complaints were filed with the Department of Labor but did not have any information about any possible investigation by the feds. 

A spokesperson for the Department of Labor would neither confirm nor deny whether there is currently on an investigation. "We don't comment on any Employee Benefits Security Administration investigations," he said. 

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