UnitedHealthcare, a former health insurance provider for the City of Hoboken, is suing them for non-payment of claims totaling nearly $60,000 as the city is in the midst of a crunch to prepare for a multi-million dollar budget deficit.
By John Heinis/Hudson County View
According to the suit, filed in Hudson County Superior Court in January 27th, UMR, a UnitedHealthcare company, agreed “to provide administration” of Hoboken’s self-funded employee benefit plan, based on a deal that took effect on June 1st, 2016.
However, that agreement only last for about a year-and-a-half, according to the claims alleged in the suit.
“Due to Hobokenâ€™s inability to remit payment in full on the past due fees, UnitedHealthcare terminated the Agreement February 1, 2018. UnitedHealthcare has honored all valid claims made through that date,” the court filing says.
“When termination of the Agreement was completed, the amount of past due fees that Hoboken owed to UnitedHealthcare was, and now still is, $59,911.40.”
From there, United allegedly sent four demand letters seeking the outstanding payments from Hoboken between December 27th, 2018 and May 23rd, 2019.
Contending that there was a breach of contract, United is seeking interests, damages, attorney’s fees costs of suit, and other such relief deemed equitable by the court.
“The City always provides payment to vendors for legitimate services performed. However, we cannot comment further on this specific case due to ongoing litigation,” city spokesman Vijay Chaudhuri said.
The latest litigation comes at a time when an anticipated budget shortfall could go as high as $14 million, with city officials citing their healthcare benefits plan, six labor union contract agreements, and generating new revenues as three major concerns.
In 2016, the year where United began their contract, Hoboken spent approximately $22.8 million on city insurance plans, a number that went down to roughly $22.7 million in 2017, according to public records of previous budgets.
That number again increased to $25.2 million in 2018, where United only served as their provider for a month, based on the lawsuit.
That number stayed consistent at approximately $25 million in 2019 and while 2020’s figures haven’t been officially released yet, Business Administrator Stephen Marks has said to anticipate about a $1.4 million increase – which would be in the ballpark of $26.4 million.
An attorney representing United could not be reached for comment on Wednesday.