Bryan Cohen May 23, 2014, 5:23pm

BUFFALO, N.Y. (Legal Newsline) - New York Attorney General Eric Schneiderman announced a settlement on Thursday with a group created to give local arts community members access to affordable healthcare that allegedly failed to pay premiums.

Arts and Culturals Collaborative LLC and Gerald Burgin, the group's founder, meant to allow members of the Western New York arts and cultural community to obtain affordable group health insurance. In return for a health insurance premium and an administrative fee, Burgin collected the payments and paid the group health insurance premium.

Burgin allegedly failed to pay the premiums for November, December and January. As a result, the coverage lapsed on December 1. Burgin and Arts and Culturals Collaborative allegedly failed to notify the group's members that the coverage was in danger of lapsing. Multiple subscribers allegedly incurred medical expenses for which they were personally responsible.

"Gerald Burgin was entrusted to ensure that members of this group received the affordable health insurance they were promised, and he dropped the ball," Schneiderman said. "This settlement brings relief to the individuals who faced personal liability for medical bills as a result of their lapse in coverage, and sends the message that my office will hold those that fail to provide the services they promise - and charge for - accountable."

Burgin allegedly used the administrative fees for his own expenses and ate into the funds required to pay for the premiums.

Under the terms of the settlement, Burgin must pay $30,000, which will be used to pay for the medical expenses of members who were not reimbursed as a result of the lapsed policy. The remainder of the money will be returned to members as pro-rata reimbursement of health insurance premiums they paid.

As part of the agreement, Burgin is banned from accepting advance payments from consumers for any service or product.

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