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Settlement with AG's Office and Group Charged with Insuring Arts Community



Buffalo, NY (WBEN) Attorney General Eric Schneiderman says he's reached a settlement with a group created to give members of the local arts community access to affordable group health insurance. He says the group allowed insurance to lapse.

“Gerald Burgin was entrusted to ensure that members of  Arts and Culturals Collaborative, LLC received the affordable health insurance they were promised, and he dropped the ball,” Schneiderman said. “This settlement brings relief to the individuals who faced personal liability for medical bills as a result of their lapse in coverage, and sends the message that my office will hold those that fail to provide the services they promise – and charge for – accountable.”

Burgin created the Collaborative as a means of allowing members of the Western New York arts and cultural community to obtain affordable group health insurance. Members would pay the Collaborative for the health insurance premium and an administrative fee. Burgin, in turn, collected the payments and paid the group health insurance premium.

Despite repeated notices from the health insurance carrier that failure to pay the premiums would result in the cancelation of coverage, Burgin failed to pay the premiums for November and December 2013 and January 2014. The carrier continued to cover the members for the month of November but coverage lapsed on December 1, 2013. Neither Burgin nor the Collaborative notified the members that the Collaborative had fallen behind in its payments of the group insurance premiums or that their coverage was in danger of lapsing. By the time they learned of the lapsed coverage, some of the subscribers had incurred medical expenses for which they were personally responsible.

Attorney General Schneiderman’s investigation revealed that Burgin used the administrative fees for his own expenses. Burgin overspent the administrative fees thus eating into the funds required to pay for the premiums. As a result, the Collaborative slowly became insolvent, leading to its catastrophic failure at the end of 2013.

The agreement requires that Burgin pay $30,000 which will be used first to pay for the medical expenses of members that were not reimbursed as a result of the lapsed policy. The remainder will be returned to members as a pro-rata reimbursement of the health insurance premiums they paid. Burgin is forever barred from accepting advance payments from consumers for any service or product.


Filed Under :  
Topics : Labor
Social :
Locations : BuffaloNew YorkWestern New York
People : Eric SchneidermanGerald Burgin
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