Broken Trust

Private health insurance company UnitedHealthcare was the insurer for about 700 employees at 40 companies through the Monterey County Hospitality Association Health and Welfare Trust. 

“Too good to be true,” was the initial response of then-chair of the Monterey County Hospitality Association, Teddy Balestreri, to the association’s plan to offer health insurance to up to 23,000 hospitality workers through a nonprofit trust. He grew to believe the plan would work, he told the Weekly weeks before enrollment began on Aug. 1, 2017.

In reality, it might have been too good to be true: The MCHA abruptly dissolved the trust on Dec. 31, 2019, leaving about 40 companies, representing approximately 700 employees, to scramble for coverage.

“We were all surprised that they did it,” says Chris Campisi, the architect of the trust since 2016 and president of Monterey Hospitality Trust, Inc., a company he founded to shepherd the process. Campisi and the board of trustees believed that MCHA would step down as sponsor of the health and welfare trust. Instead, the MCHA dissolved it, which was within its legal right to do, Campisi says.

The idea behind such trusts is to leverage a group of small companies and their employees to access health insurance at a lower cost than can be found on the open market. Some purchased health insurance for their family members for the first time.

Campisi estimates the trust saved participating hospitality companies and their employees between $2.5 million and $3 million in costs over the two-and-a-half years of its existence.

The trust and MCHA are among the defendants in an ongoing lawsuit filed by a worker who was denied coverage by provider UnitedHealthcare a year after the trust formed and began offering coverage. MCHA representatives did not return calls or emails for this story.

Campisi is at work creating a new statewide trust he believes might be able to provide insurance to those who lost it locally. In the meantime, some companies previously in the trust have found coverage elsewhere, according to John Abbott, a benefits adviser with Petra Risk Solutions, representing several hospitality companies in Monterey County.

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