Wichita-based health care company to lay off local employees after feds allege fund misuse
Wichita-based Medova Healthcare expects to lay off about 70 local employees this summer, according to a notice the company filed with the state.
Medova Healthcare employs about 100 people in Wichita at 8300 E. Thorn Drive in Wichita, near 37th Street North and Rock. The expected layoffs represent about 70% of its local workforce, according to a letter about the job losses. The business is a third-party administrator of corporate group health benefits.
A majority of Medova’s clients will move to another third-party administrator on July 1, according to the letter.
“Due to these unforeseeable business circumstances, Medova will be forced to make a permanent reduction in force,” the company’s president wrote in the letter to the state.
The timing of the layoffs may change depending on Medova’s needs at the time.
Under federal law, any company that employs 100 or more full-time workers must provide at least a 60-day notice if 50 or more workers will lose their jobs at one location. The Worker Adjustment and Retraining Notification Act is meant to allow workers time to find other employment or seek new training.
The U.S. Department of Labor filed a complaint against Medova Healthcare in December, alleging the business misused its funds and created a critical funding deficiency for some health plans, leaving beneficiaries without benefits.
The Medova arrangement in the complaint provided benefits for at least 2,600 health plans covering more than 35,000 employees in 38 states as of November, according to the U.S. Labor Department.
In April, the court appointed a receiver to oversee employee benefit plans previously administered by Medova Healthcare. Receivership Management aims to resolve and pay outstanding claims so plan participants receive benefits.
Medova Healthcare was founded in 1999, according to its website.
This story was originally published June 1, 2021 at 2:57 PM.
