Insurance Company Reinstates Vet After 7NEWS Story

Ronald Flanagan's Health Insurance Was Dropped Over 2-Cent Shortage

A Vietnam Veteran who was dropped by his insurance benefits administrator over a 2-cent shortage had his health benefits reinstated Wednesday afternoon -- one day after 7NEWS exclusively aired his story.

Ron Flanagan's story went viral, with news outlets from around the country calling him to talk about his plight with Ceridian Cobra Services.

"It was overwhelming. We couldn't believe the amount of support and attention," said Ron.

Ron's wife, Frances Flanagan, admits she made a mistake in November when she paid their monthly health insurance premium online. Frances swapped a 7 for a 9, leaving their $328.69 payment 2 cents short.

Their insurance benefits administrator, Ceridian Cobra Services, based in St. Petersburg, Fla., promptly dropped the Flanagans for the 2-cent shortage without a phone call, a certified letter or even a letter warning them they could be dropped, the Flanagans said.

But on Wednesday, under intense public pressure and a national outcry, Ceridian reinstated Ron's benefits. Ron said he even received a call from Ceridian's CEO, Stuart Harvey.

"He called and he said he wanted to talk man to man and apologize for what happened, and what this has put me and my family through. He said no one should have to go through that for that kind of amount. He said we don't mean to be that kind of company," said Ron.

Frances said she is elated about the decision.

"It's like a ton of bricks just fell off me. And I know a ton of bricks just fell off my husband," said Frances.

Ron has been fighting cancer since September 2008. He has multiple myeloma -- cancer in the bone marrow. The family believes the cause of Ron's cancer is likely exposure to Agent Orange while Ron was deployed in Vietnam.

Doctors at St. Luke's have performed stem cell transplant surgery twice. He needs another transplant before the end of February, and they have a donor. But because of the 2-cent mistake, Ceridian Cobra Services had said they would not pay for the procedure.

In a statement on Tuesday, Ceridian Cobra Services told 7NEWS, "We did not receive a full and timely payment and (Mrs. Flanagan) was provided several notices of the shortage and a grace period reminder notice on the last invoice, along with extended grace dates as provided for under COBRA regulations. ...Since the payment was not full, it fit into the definition in the regulations of an 'insufficient payment' ... Ceridian understands nothing is more important than one’s health ... Unfortunately, we simply do not have the capacity to be able to personally call continuants and remind them of the status of their COBRA benefits."

However, on Wednesday, Ceridian reversed course.

In a statement released Wednesday afternoon, Ceridian said, "Ceridian empathizes with Mr. Flanagan and we have been working diligently to help him. We are pleased to say that we have succeeded in working with his employer to reinstate Mr. Flanagan’s COBRA coverage. To correct and clarify previous reporting, Ceridian is the administrator for Mr. Flanagan’s COBRA claims, and not the fiduciary or insurer responsible for providing his healthcare coverage. As such, we do not establish rules regarding termination and reinstatement, but rather are bound to administer coverage rules established by employers in accordance with strict federal law and regulations, which we have thoroughly and completely followed in providing the appropriate notices and grace periods in this case. We communicated with Mr. Flanagan’s former employer, the fiduciary in this case, and asked them to reinstate his COBRA coverage, which we are very pleased that they in fact did."

The Flanagans had Ceridian Cobra Insurance through Frances' former employer -- Hunter Douglas of Broomfield. Hunter Douglas said it worked with Ceridian to get coverage reinstated.