Class action alleges BCBS kept premiums of 'ineligibles'

Steve Gonzalez Aug. 30, 2007, 5:42am

An Alhambra man filed a class action suit against Blue Cross Blue Shield (BCBS) of Illinois alleging the insurer violated the Illinois Consumer Fraud and Deceptive Practices Act in connection with the sale and issuance of health insurance policies.

Mark Gause, who bought health insurance for himself and his family, claims BCBS failed to tell him that his daughter's coverage ended while continuing to collect premiums for ineligible dependants.

According to the complaint filed Aug. 27 in Madison County Circuit Court, the section entitled "Coverage and Premium Information" states family coverage is for health care expenses enrolled persons, their spouse and unmarried children under age 19.

Unmarried children who are full-time students can be covered up to age 25, and their coverage will end on the last day for which the premium has been paid after their 19th or 25th birthday, or the date the child gets married.

Gause applied for family coverage and was accepted on Aug. 10, 2005. His policy became effective Sept. 24, 2005.

He claims when he purchased the policy, two of his children were full-time college students and unmarried.

On March 13, Nancie Gause, one of Gause's daughters, who was still not married and slated to graduate in May, received medical treatment which she believed to be covered by the BCBS policy.

Gause received a letter on March 29, informing him his daughter was no longer an unmarried dependant child and was no longer covered under the policy.

According to Gause, he provided BCBS documentation that his daughter was still a full-time college student and the claim was eventually paid.

Gause claims he then checked to see if his other daughter, Megan, who graduated college in 2006, was still covered. He was told that her coverage ended in 2006, after her graduation.

"Plaintiff then requested that Defendant return a portion of his previously paid premiums for the period that Megan wasn't covered under the policy," the complaint states. "Defendant refused to return any monies."

Gause claims that refusing to return a portion of the previously paid premiums when BCBS denied honoring or paying claims submitted on behalf of ineligible covered dependants also violated the consumer fraud act.

He claims a class action is an appropriate means for the "fair and efficient prosecution" of the litigation and also claims that most class members are not aware of the alleged wrong or their right to legal redress, making a class action essential.

"Defendant derives enormous aggregate profits from wrongfully depriving thousands of persons of amounts ranging from several hundred to several thousand dollars each week," the complaint states.

"In absence of a class action, this serious wrong will go unredressed."

Gause is seeking compensatory damages, punitive damages, costs of the suit and proper and reasonable attorney fees.

"Defendant, as a health insurance provider, owed Plaintiff a duty to act in the utmost good faith and undivided loyalty towards Plaintiff and persons covered under his policy and honor and pay all covered claims and charge premiums for only eligible covered persons," the complaint states.

Gause and the putative class are represented by Maryville attorney David Hicks.

The case has not yet been assigned.

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