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NorVergence hit with new pay flap
By MARTHA McKAY NorthJersey.com/New Jersey Herald/Record NorVergence, a Newark-based telecommunications reseller that went bankrupt last month, left a trail of angry ex-employees who say they are stuck with tens of thousands of dollars in unpaid medical bills. The employees say NorVergence was deducting medical insurance costs from their paychecks, but apparently fell behind in payments to the company it hired to administer its insurance plan. Now, the federal government is asking questions. At least one former NorVergence employee, Mark Englander, said he has been contacted by an investigator from the U.S. Department of Labor who asked for detailed information about the insurance problems. A spokeswoman for the Labor Department said she could not confirm that an investigation is taking place. Last month, the New Jersey Department of Labor said it was looking into reports by NorVergence employees that their final paychecks had bounced. A spokesman said the state's investigation is limited to the wage dispute. NorVergence went out of business last month owing creditors such as Qwest and Sprint as much as $30 million. It also left as many as 11,000 small business customers who signed up for discount phone and Internet service owing upward of $220 million to banks and finance companies for a piece of equipment that many say was useless. Some have called it one of the biggest leasing scandals of the last quarter-century. The man who ran the company, Thomas N. Salzano, sat at the helm of another telecommunications company that went bankrupt in 1999. Neither Salzano nor his brother, Peter J. Salzano, NorVergence's CEO, could be reached for comment. It's not known how many of NorVergence's 1,300 former employees have unpaid medical claims. NorVergence was self-insured and hired a Melville, N.Y.-based company, Comprehensive Benefits, to administer health insurance for its employees, said former employees and others familiar with the business relationships. Comprehensive Benefits in turn rented access to the health-care networks of two health insurance companies - Qualcare Inc. of Parsippany and Beech Street, based in Lake Forest, Calif. QualCare said it was aware of the NorVergence bankruptcy, but a spokeswoman for Beech Street said she had not been told by Comprehensive Benefits that its customer, NorVergence, was out of business. Melissa Bauer, a Kearny resident who had worked at NorVergence since August 2002, said that she is owed $1,300 for medical bills dating back to January. "I'm very upset about this," said Bauer, who lost her job along with about 1,000 others on June 30, days before the company filed for Chapter 7 liquidation. "I am still a month behind in my bills. Now I have an extra bill and more headaches." Bauer said Comprehensive Benefits told her that NorVergence had promised to pay its bills but never did, and because of that Comprehensive Benefits would not pay Bauer's claims. "I told the young lady that I had claims going back from January and she said for me to contact the Department of Labor and hung up on me," Bauer said. Other former employees interviewed also said they were told by Comprehensive Benefits that NorVergence had not paid its bills "for months." So far, Comprehensive Benefits has not filed paperwork with the U.S. Bankruptcy Court in Newark claiming that NorVergence owes |it money. The company did not return repeated phone calls. And former employees are scrambling to figure out whether they can get new insurance, or get old claims paid. Former NorVergence employee Oscar Delatorre said he's aware of one former colleague with more than $15,000 in unpaid claims and another who gave birth in February and may get stuck with the bills. Meanwhile, he's coping with his own family's health care claims, which date back months. "I'm out between $6,000 and $7,000," he said. |
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