State to wind up operations of federally funded Kentucky Health Cooperative, says it will not assume liability for losses

The Kentucky Department of Insurance is taking control of the day-to-day operations of the failed Kentucky Health Cooperative, but will not assume any of its liabilities, according to a state news release.

Franklin Circuit Judge Phillip Shepherd signed the order Thursday to place the co-op into rehabilitation, and makes Insurance Commissioner Sharon P. Clark the rehabilitator. The order also appointed Jeff Gaither and David Hurt, both on contract with the department, as special deputy rehabilitators, department spokeswoman Ronda Sloan said in an e-mail. Glen Jennings has said that he will continue to serve as the acting Kentucky Health Cooperative CEO through Nov. 8, when his contract expires, according to Sloan.

Clark said in the release, “Today’s action placing KYHC into formal rehabilitation was necessary to ensure DOI is in a position to protect consumers and providers. Our central concerns are making certain policyholders receive the services to which they are entitled, and that the providers offering those services honor existing contracts and receive payment.”

The co-op announced in early October that it would be closing, but would meet its obligations to its members through Dec. 31.  Co-op members must apply for coverage with a different insurance company by Dec. 15 to have coverage on Jan. 1. Open enrollment runs between Nov. 1 and Jan. 31.

Cooperative policyholders and providers with complaints or other issues related to the rehabilitation action should call the Insurance Department at 800-595-6053.