Employer stops paying insurance premiums but fails to notify workers

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PHOENIX -- You may think you have health insurance, but do you know that for sure?

A Gilbert woman thought she had insurance, but in reality she didn't.

Now, by all accounts she didn't do anything wrong. However, what happened to her can certainly happen to you.

Kathy Boschma-Gillard says she and her husband were thrilled last year when they discovered she was pregnant.

"We were elated. We were so excited," she said. "We couldn't wait to get pregnant and we have a 6-1/2-year-old and she was very excited to be a big sister for the first time."

Now, having a baby can be expensive, but Boschma-Gillard wasn't overly concerned because she had Blue Cross Blue Shield health insurance provided by her husband's employer.

"Nope, nothing, no worries at all, never thought to question it," she said.

Boschma-Gillard says her pregnancy went fine and all of her prenatal visits were covered by Blue Cross Blue Shield. That is until she gave birth to her little boy.

As it turns out, Boschma-Gillard lost her insurance just before she gave birth at the hospital and she never knew it until she went home with her new baby.

"I went to pick up a prescription and the pharmacy tech said, 'You don't have any insurance so you'll need to notify your carrier to find out what's going on," Boschma-Gillard said.

It turns out Boschma-Gillard's husband was working, but his employer apparently stopped paying premiums to Blue Cross Blue Shield and, as a result, the insurance carrier dropped all coverage.

As a result, Boschma-Gillard was stuck with enormous medical bills.

"Over $14,000 -- $14,000 and some change," Boschma-Gillard said.

Knowing she would have to pay the bills, Boschma-Gillard called the hospital and every health professional associated with delivering her little boy and negotiated a payment.

"We originally owed $14,000 and some change," she said. "Then we got it down to $7,800."

A bill literally cut in half just by working the phone and explaining her situation.

It's a sound lesson that everyone should learn from.

"Take care of it right away," Boschma-Gillard said. "Every time I received a bill I was on the phone that same day with whoever we owed money to."

The reason the employer stopped paying the insurance company is because it was going bankrupt and it was cutting costs to survive.

However, they didn't pass that important piece of information on to Boschma-Gillard and her husband.

But Boschma-Gillard did what you're supposed to do. She didn't hide. She didn't wait for these bills to go to a debt collector. She took responsibility and successfully negotiated her bills to a manageable amount.