Meritus to wind down operations, lay off staff

Tom Zumtobel, CEO of Meritus Health Partners, gave it the old college try, but he just couldn’t quite pull it off.

After Meritus was dumped from the Affordable Care Act’s Health Insurance Marketplace, Zumtobel had been looking to secure outside funding to get back in good standing with the feds.

His goal was to raise enough money by Dec. 1, hoping that would be enough to convince the U.S. Centers for Medicare and Medicaid to let Meritus back on the exchange. But he couldn’t get the funding in place in time.

“We had a couple of opportunities,” he said. “We weren’t able to make it happen in time to participate in this enrollment period.”

Of the company’s 62 employees, 14 will lose their jobs before the end of the calendar year. Zumtobel’s last day is Jan. 8, but the rest of the staff will stay to handle heavy claims volume in January and February.

Once that claims volume starts to taper off, Zumtobel said there will only be a need for a handful of employees to process claims through the end of 2016.

“We’re going to have the right resources to meet all our policyholders’ commitments covered through the end of the year,” he said.

Health care providers have six months from the date of service to file a claim, he said.

“We’re working cooperatively with the Arizona Department of Insurance and winding down the operations,” he said.

“We’ll continue dialogue with CMS and understand what will happen,” he said. “There’s still reinsurance money out there, risk adjustment money that still has to be reconciled. It’s just unknown at this time what the final obligation will be and what the final outcome will be. There’s a lot that still has to happen.”

Meritus isn’t the only health insurance cooperative funded by the feds to go under. It is among a dozen federally funded health plans to shutter operations.

Angela Gonzales covers health, biotech and education.