Source: North Jersey.com
Health Republic’s website says that its priority “is to ensure that all members and providers receive the service and payment promised them under the terms of the health insurance plans.” A company spokeswoman declined to comment.
“Throughout this process, claims have been paid normally, without interruption or delay,” said Marshal McKnight, a spokesman for the state Department of Banking and Insurance. “Providers have been submitting claims as they normally would and should continue to do so.” The state will notify providers of any important new developments, he said.
Claims to the insurer eventually will become the responsibility of the New Jersey Life and Health Insurance Guaranty Association, a group formed of all the insurers that issue health and life insurance in the state, McKnight said. “The date when that will occur has not been set yet,” McKnight said. The association’s purpose is to pay claims when a member cannot because of insolvency; its members are assessed fees to do so.
Insurance Commissioner Richard J. Badolato filed the liquidation request with Judge Paul Innes in December. A hearing is set for Feb. 24.
“Freelancers’ is insolvent and there are no options other than to liquidate the insurer and run-off its business,” Badolato said in his filling, referring to the insurer by its corporate name, Freelancers Consumer Operated and Oriented Program of New Jersey.
The company was started with federal loans totaling $109 million to Freelancers Union, a New York-based nonprofit advocate for independent workers. It was one of three companies sponsored by Freelancers; all three have shut down.
The company’s financial condition worsened after it was placed in rehabilitation, similar to a bankruptcy restructuring, in October, he said. Health Republic was unable to negotiate an infusion of cash from investors to stabilize the company’s finances.
The company projected that its incurred-but-unpaid claims would outstrip cash on hand by more than $18 million this month, according to a certification by the state’s chief insurance examiner, Richard Schlesinger.