Local News

State: Raleigh exec let employees' health coverage lapse

Posted November 19, 2010 12:15 p.m. EST
Updated November 19, 2010 7:03 p.m. EST

— State regulators say an executive of a defunct Raleigh nonprofit didn't pay the health insurance premiums for her five employees, costing them their coverage and thousands of dollars in medical bills.

Tonja Jordan Austin, 38, of 109 Hilary Place in Cary, was arrested Thursday and charged with two counts each of failing to pay group health insurance premiums and failing to properly notify people covered by the policy that the premiums were no longer being paid.

Austin was the co-owner of Integrated Family Solutions, a community-based mental health agency that recently closed its offices in Raleigh and Durham. The state Department of Insurance said Friday that she didn't pay premiums to United Healthcare, and the nonprofit's health policies were terminated on Dec. 1 and April 1.

State law requires that employers give workers 45 days written notice if they are canceling or terminating health coverage.

"In instances like this, most people will not know until it's too late," Insurance Commissioner Wayne Goodwin said.

One Integrated Family Solutions complained to the DOI, prompting the state investigation, after amassing more than $13,000 in medical bills that weren't covered by insurance, Goodwin said.

"It causes tremendous heartbreak and havoc for family finances," he said.

Goodwin said such cases occur more often in a soft economy because companies try to cut costs by dropping insurance coverage. So far this year, the DOI has investigated 41 cases, resulting in eight arrests and two convictions.

"These are serious allegations and certainly serious criminal acts that affect anywhere from a few employees to thousands of employees," he said.

People who have health insurance through their employer should double-check that the premiums are up to date before before having a major procedure, he said.

Austin, who was released on a $10,000 bond, declined to comment when reached by phone.