Two cents short

As reported on KMGH Denver, Ronald Flanagan, a Vietnam veteran, got the most unwelcome of surprises from his insurance company, when it dropped him for a simple two-cent ($0.02) mistake on his premium payment. Instead of paying the proper amount, $328.69, Ronald’s wife Frances keyed the amount as $328.67. That was in November.

Fast forward to Ronald’s doctor appointment on January 13. From the story:

The couple found out about losing their coverage at a doctor’s appointment on Jan. 13 while they were at the Exempla Rock Creek Medical Center in Broomfield.As Ron was getting prepped to have a bone biopsy, Frances was on the phone with Ceridian.

“The nurses were just getting ready to do the biopsy when my wife popped into the office and told them, ‘Stop. We don’t have any insurance,'” said Ron.

“And that’s when they let me know that we no longer had insurance on account of the 2 cents, and they canceled us,” said Frances. “Since then, I’ve been depressed. I haven’t been able to hardly do anything. As you can see, we still have our Christmas decorations up. So it’s been hard on me.”

I would have been a bit more understanding of Ceridian’s position were the amount significant (at the very least, over $1). It almost seems like Ceridian looks for a chance to drop unsuspecting customers when they are about to need their benefits the most–and thus, when they are about to cost Ceridian the most money. To make matters worse,┬áCeridian does not help their case when they say the payment fits the regulatory definition of an “insufficient payment” and use this to justify their action. According to the Flanagans, Ceridian never even gave them notice that they were about to cancel Ronald’s policy because of the two-cent mistake.

From a public relations standpoint, this is a huge mistake on the part of Ceridian. Especially since this is a Vietnam veteran we’re referring to. The right thing to do, in case it’s not obvious, is for Ceridian to reinstate Ronald’s policy and benefits without further delay. It’s not worth the PR fallout to do what is technically allowed by insurance regulations, just because. The trust and goodwill retained by doing the right thing are worth a lot more than two cents.

But I this kind of thing is a symptom of a larger problem. The people doing the accounting for insurance companies only care about maximizing profits. In fact I don’t think a human employee at Ceridian ever actually made the decision to cancel Ronald’s policy; it was almost certainly a decision made by a computer. Now, don’t get me wrong, computers are great, and are responsible for a lot of conveniences in 2011 that simply were not possible decades ago. But decisions like this should not be entrusted to a hunk of metal and silicon with all the intelligence of a very stupid worm. Computers do what they are told; in fact they do exactly what they are told and nothing more. However, there does come a time when a human should review certain items and say “wait a minute, this guy was only short two cents, this may have just been a simple mistake and it’s not reason to cancel his policy.”

Do the right thing in cases like this, and profit will follow, and everyone will be happy.