A group of former employees filed a federal class action suit against Atrium Health, accusing the healthcare system of trying to swindle them over health and retirement benefits.
The Charlotte Observer reports that Atrium, formerly Carolinas HealthCare System, claimed to be an arm of the government to get out of benefits commitments. Specifically, the federal Employee Retirement Income Security Act, known as ERISA, provides protections such as requiring employers to set aside minimum amounts to cover pensions.
According to the complaint filed in the U.S. District Court for the Middle District of North Carolina, there are two issues at play in the suit: whether the healthcare system has adequately funded and protected employee pensions, and whether providing healthcare benefits to employees through a company it jointly owned allowed it to charge significantly more than alternate networks.
Atrium has claimed an exemption as a government entity to ERISA protections which would have barred both of these concerns, said lead plaintiffs’ attorney Karen L. Handorf, partner at Cohen Milstein Sellers & Toll PLLC, chair of the firm’s employee benefits practice group, in a release about the suit.
“Atrium Health has jeopardized the well-being of its employees and their families for far too long,” Handorf said. “Plainly and simply, Atrium Health is not nor ever has been a government entity. Atrium is a healthcare behemoth trying to get away with spending money to expand its operations rather than on its employees. We are confident that the court will hold Atrium accountable to its legal obligations and ensure the company protects participants in its retirement and healthcare plans.”
Atrium Health said in a statement Monday it had not been served with the lawsuit, but would review it and answer it in court.
Earlier this year, Atrium faced a lawsuit from a physicians' group in an unrelated matter as they sought to be freed from their employment contracts and noncompete clauses. The nonprofit health system agreed to allow the Mecklenburg Medical Group operate independently.
Last week, Atrium reached a settlement with the Justice Department over what the DOJ called "anticompetitive steering restrictions" in contracts between its providers in the Charlotte metropolitan area and commercial health insurers. It comes less than a month after Senate Judiciary Committee Chairman Chuck Grassley called for the Federal Trade Commission to examine "potentially anticompetitive contracting practices between insurers and hospital systems," including Atrium.