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Rod Smith

Horseshoe Woes Continue: Sources: Medical Bills Unpaid

28 January 2004

LAS VEGAS -- Hundreds of Binion's Horseshoe former workers may have to pay millions in unpaid medical bills even though the gaming company deducted medical insurance premiums from their paychecks.

Some former nonunion employees, which could number up to 1,000 over the past two years, have been forced to file for bankruptcy protection, have had their credit ratings wrecked and have had to cover their health-care costs themselves despite paying for insurance coverage, sources close to the situation told the Review-Journal.

Dave Bohlen, a dice table boxman at the Horseshoe for 17 years, said his medical bills have been turned over to a collection agency because of three unpaid claims.

"I don't know how many people's credit has been ruined, but some of us have had to file personal bankruptcy because (they) couldn't afford their health-care costs themselves," he said. Bohlen said he will have to spend months trying to clean up his credit rating.

Before being forced to close on Jan. 9, the downtown hotel-casino was self-insured and retained Mediversal to manage its health-care program for workers, but never turned over any funds to cover worker medical costs, sources close to the Las Vegas-based administrative services company said.

The sources, who asked not to be named, said the payment deficiencies amount to "several million dollars," although the specific amount and the exact number of workers affected are unknown because executives of the Horseshoe have told Mediversal they had negotiated claims settlements with a limited number of employees on their own.

Steve Mashburn, another displaced nonunion worker, said the Horseshoe notified workers in a June memorandum that health-care payments could be negotiated on a case-by-case basis. The memo said the workers would have to complete detailed paperwork to prove their claims, he said.

Mashburn, a 16-year veteran with the Horseshoe, said he had heard some claims had been settled with the Fremont Medical Clinic, but he knew of no affected workers who had had their medical bills corrected.

He said what upsets him the most is that after getting burned, the Horseshoe forced him to complete extensive added documentation, but settled none of his claims and left him with the same bills as before, plus interest.

"It's a sad state of affairs. It could have been nipped in the bud a long time ago by gaming control. They knew her husband was running the company from home. They could have done something about it and never did," Mashburn said about Horseshoe owner Becky Binion Behnen and her husband, Nick Behnen.

Becky Behnen and her husband, who had no management role in the Horseshoe, declined to comment on the deficiency in payments to cover employee health-care costs.

Bohlen said he and his fellow former employees are angry enough to want to file a class-action lawsuit against the Behnens.

"We went in in good faith. They took our premiums out every two weeks. Then we went to our medical provider, we paid our co-pay, and now here comes the bills because she (Becky Behnen) hadn't given Mediversal any money to pay the bills," Bohlen said.

Sources familiar with the situation and with operations such as Mediversal said affected workers may have legitimate legal claims against the Horseshoe.

Harrah's Entertainment, which has a definitive agreement to buy the Horseshoe and has said it will cover all claims by bona fide creditors, "declined to discuss specific claims at this time."

Harrah's agreement to buy the landmark downtown casino was worth an estimated $50 million, mostly in the form of assumed liabilities.

With no word on repayments from the Horseshoe or Harrah's, another gaming official said former nonunion employees are simply being left in a lurch.

"We don't know what they're going to do. No one has ever said anything," said Frank Smith. He said some workers have been told the National Labor Relations Board may intervene, but in the meantime, former nonunion workers are dealing with the real world problems of bankruptcy and wrecked credit ratings.

Union workers' health benefits were covered under the contract with the Culinary union and their benefits are not in question.

Under the self-insurance program, the Horseshoe deducted a premium from employee paychecks every pay period and paid a monthly administrative fee to Mediversal to process all claims and send it a report on the employees' medical bills.

Under the terms of the arrangement, the Horseshoe was then responsible for paying Mediversal, which would have distributed the funds to affected employees.

However, over the course of more than two years, sources close to the situation said, the Horseshoe forwarded no money to Mediversal to cover worker claims that had been determined to be legitimate and processed.

Nearly all nonunion employees were covered by the self-insurance program. There were approximately 460 nonunion employees Jan. 9 when deputy U.S. marshals armed with court orders authorizing the seizure of $2 million entered the Horseshoe casino and ordered it closed. An estimated $1 million was seized.

However, officials estimated there were nearly 1,000 nonunion employees two years earlier, and data is not available on the amount of turnover in the interim, sources said.

Horseshoe Woes Continue: Sources: Medical Bills Unpaid is republished from