Leukemia Patient Says Insurance Was Canceled Over 26-Cent Payment Shortfall

Aug. 15, 2013 — -- A New Jersey father who was laid off from his job while battling leukemia had his health insurance benefits canceled after a check sent as payment was mistakenly 26 cents short, his wife said.

Sergio Branco, 33, thought he might be having a heart attack in January when he started experiencing chest pains. The father of two, who also has a stepchild, was driving trucks for a New Jersey-based waste management company when he went to the hospital to get checked out. A bone marrow test confirmed he had acute myeloid leukemia (AML), a fast-growing cancer of the blood and bone marrow.

"He went to pick up my 2-year-old and felt pain in his chest. He has high blood pressure," his wife, Mara Branco, told ABCNews.com. "We found out his Y-cells are extremely high. They ran a test two days later and found AML."

Branco, who lives with his family in Edison, N.J., took a three-month leave from work while undergoing chemotherapy at St. Peter's University Hospital in New Brunswick, N.J. He was eventually sent to undergo treatment at the cancer ward at New Brunswick's Robert Wood Johnson University Hospital.

"[During the chemotherapy] there were stages. Some were better than others," his cousin, Sandy Marujo, told ABCNews.com. "It was different. Sometimes he'd be tired, nauseous. He's been in and out since January."

After rounds of chemo, doctors treating Branco began the process of human leukocyte antigen (HLA) typing in order to match a bone marrow donor. They were able to find a 9-point match, according to Mara Branco.

The Brancos set a bone marrow transplant for Sergio Branco for Aug. 16, and he continued his treatment.

But on April 30, after his three-month leave under the Family and Medical Leave Act was up, he was laid off by his employer, Russell Reid.

Despite the end of his employment, Branco and his wife made arrangements to extend his insurance through the Consolidated Omnibus Reconciliation Act (COBRA).

COBRA allows employees who have been laid off to get temporary continuation of health coverage at group rates.

On May 1, the Brancos received a letter stating that they had 60 days to elect coverage under COBRA, and that payment would be due no later than 45 days after the date of election, according to Mara Branco.

She told ABCNews.com that she contacted Paychex, the company handling the extension of benefits, and discovered that the monthly rate to extend her husband's insurance would be $518.26 per month.

Towards the end of May, she said, she filled out the requisite paperwork and mailed a check to Paychex for the first month of coverage. But she mistakenly sent a check for $518 -- 26 cents less than the billed amount.

Still, Paychex cashed the check on June 11, she said. In early July, while continuing her husband's treatment and anticipating his August transplant, the Brancos got some shocking news.

"The hospital said he didn't have insurance since May 5," Mara Branco said. "So I called Paychex, and they told me they canceled my policy for non-payment. They said that on my check I was 26 cents short, so they didn't apply it to my account. But they had cashed my check on June 11.

"I asked if they sent a letter saying I was 26 cents short. They said, 'No, we don't do that,'" she said.

Mara Branco said Paychex also told her the company hadn't received payment for June, but she claimed that she never received a bill.

Soon, the couple received a hospital bill for $70,000.

While Mara Branco was attempting to sort out the situation, Paychex told her that there was no option to bring her husband's insurance payments up to date, and that the company was instructed by Russell Reid not to accept any more payments from the Brancos, she said.

"[Paychex] said the only way we can accept payment is if the employer tells us that we can," she said. "They said there was a note on my account not to take payment."

The Brancos didn't even receive notification of cancellation of their policy until the beginning of July, she added.

"They canceled my policy on May 5, and I didn't get the letter to July 2," Mara Branco said.

After that, Paychex returned the $518 payment.

When contacted by ABCNews.com, Paychex spokeswoman Laura Saxby Lynch denied that Branco's insurance was canceled over a 26-cent underpayment, but added she could not discuss the situation further.

"There are more facts related to the story and the process that I can't get into because of pending litigation," she said.

Lynch also would not comment on whether or not the payment was returned to the Brancos.

Mara told ABCNews.com that although she has a lawyer, she has not filed any lawsuits against Paychex or Russell Reid.

A representative from the DOL told ABCNews.com that it is their policy not to confirm or deny the existence of investigations.

Calls placed to Russell Reid by ABCNews.com seeking comment were not returned.

Mara Branco soon decided to contact the federal Department of Labor (DOL) about what was happening. She said that the DOL repeatedly contacted Russell Reid, but was given the run-around.

She said that it took multiple calls from the DOL to Russell Reid, and in total, three weeks since she initially contacted the DOL to resolve the situation.

"Every time they tried to contact Russell Reid, it was never OK," Mara Branco said. "It took the federal government a lot to get me restored."

On Monday, a check for Sergio Branco's insurance payments for the past few months was finally accepted by Paychex, which confirmed with ABCNews.com that his policy is back in effect.

"Mr. Branco was fully reinstated and successfully enrolled in coverage on Monday," Lynch said.

Sergio Branco's transplant has been pushed back from Aug. 16 because he must meet with a doctor in New York this week to undergo some tests. On Monday, the couple should find out when he will have surgery.

For Mara Branco, who is juggling three kids, a sick husband and an insurance nightmare, the situation has been "agony."

"I'm sure there are other people in the same situation that I was," she said. "You have to be very strong-minded to get things done."