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County goes with Good Health Plan

Health insurer agrees to honor terms union employees had with QualMed

The union representing Jackson County employees has found new health-insurancecoverage for its members but will pursue its lawsuit against the Portland-basedhealth maintenance organization QualMed.

The 550 employees represented by the union are enrolling in the ProvidenceGood Health Plan during the next three days, said Barbara Kellogg, spokeswomanfor Oregon Public Employees Union Local 503.

I think Providence is really trying to be good citizens,she said. They said they will honor QualMed's contract with us atthe same rates and provide the same benefits.

Jack Friedman, executive director of Providence Health Plans, said Providenceinsures many city and county workers, including Mulnomah County employees.

Providence was able to set up health coverage quickly, which the unionneeded, because the HMO has a local office in Medford, Friedman said.

QualMed had given the union 30 days' notice that it would cancel healthcoverage by Oct. 31, nine months before the four-year contract was to expire.

The union filed suit in Jackson County Court Oct. 23, seeking $408,652in excess premiums paid to the company and costs resulting from the cancellation.

Jackson County Judge Phil Arnold signed a temporary restraining orderOct. 24 preventing QualMed from canceling county employees' coverage beforea hearing on Nov. 3.

The union's broker and county benefits staff worked out an arrangementfor coverage with the Good Health Plan, Kellogg said. Because of that, unionmembers decided not to try to force QualMed to honor its contract in court.

QualMed then agreed to continue coverage until Nov. 31 so employees wouldn'thave to go without coverage, said QualMed attorney Ted Falk.

Kellogg said the union plans to continue with its lawsuit against thefor-profit health insurance company. The suit accuses QualMed of breachof contract and seeks reimbursement of costs resulting from the cancellation.

The two sides disagree on the contract's premium and its cancellationclause.

Falk said the issue is not whether QualMed could dip into a fund setaside by the union if claims became higher than expected, as was reportedearlier.

He declined to explain why QualMed decided to cancel the policy exceptto say that it was a business decision.

Kellogg said the employee association never signed QualMed's standardcontract that contains the 30-day pullout clause. She said union officialssigned only the rate guarantee clause.

She also said the union had paid a higher initial rate per member thanthe actual cost of the coverage to sweeten the pot for QualMed.

We would have never front-loaded and paid them more per memberif we thought they could pull out in 30 days, Kellogg said.

They underbid the contract and they're losing money, shesaid. We knew they underbid the contract. They were giving us a gooddeal.

She said QualMed officials told the union they wanted to sign a significantemployee group in Southern Oregon to give the company a toeholdin the market.

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