Serco Inc. announced it is shuttering its processing facility in Wentzville, Missouri in June, a move that will affect 850 employees. Serco Inc., the Americas division of British-based Serco Group plc (LON:SRP), processes Affordable Care Act (Obamacare) applications at the facility in Wentzville.
When the Wentzville Center opened in the summer of 2013, it hired hundreds of employees. Wages ranged from $12.00 and $27.00 an hour with 401(k) and health insurance benefits. The closing of the facility in June will affect the remaining 850 employees. Serco has other processing facilities in Kentucky and Arkansas.
Serco was awarded a $1.2-billion, five-year contract by the Centers for Medicaid and Medicare Service (CMS) in July 2013 to process applications for the Affordable Care Act. Wentzville was one of three locations that Serco opened nationally to handle applications from those expected to sign up for health insurance.
That contract expires in the summer of 2018. CMS did not say whether the contract has been renewed or been awarded to another company. It also did not say if the other sites are closing.
CMS issued a statement on the closure of the Wentzville facility.
“To maximize operational efficiency outside of open enrollment periods, Serco … is scaling down their activities. The work that Serco does to support the Exchange is seasonal in nature, and is staffed to handle the demands of open enrollment periods. As has been done in previous years, we will continue to work with contractors to manage staffing levels throughout the year to meet consumer demand.”
This isn’t the first time the Wentzville facility has garnered the wrong kind of attention. Reports surfaced in 2013 and 2014 that employees had little to do and were spending their time reading books and playing games. This prompted Congressional inquiries with Senator Roy Blunt, R-Mo, saying the agency was withholding details about the way it spends taxpayer money.
Rep. Blaine Luetkemeyer, R-St. Elizabeth echoed that sentiment, saying the agency’s response to the claims was an “embarrassment” and “woefully incomplete.”
In August 2015, the Wentzville facility had to pay out roughly 13,229 hours of overtime to keep up with the backlog. A spokesperson with the Centers for Medicaid and Medicare Services said that the cost of the overtime was covered under the original contract and there was no extra cost to taxpayers.
In July 2017, Serco laid off an unspecified number of employees, saying there was little to no work to do.
In response to the layoffs, the Centers for Medicaid and Medicare Services released a statement that sounds eerily familiar.
“To maximize operational efficiency outside of open enrollment periods, Serco, a CMS contractor that supports the Health Insurance Exchange is scaling down their activities. The work that Serco does to support the Exchange is seasonal in nature, and is staffed to handle the demands of open enrollment periods. As has been done in previous years, we will continue to work with contractors to manage staffing levels throughout the year to meet consumer demand.”
There will be no more identical statements coming from the Centers for Medicaid and Medicare Services after the Wentzville facility closes this June.
“Wentzville Obamacare processing center to close, affecting 850,” St. Louis Post Dispatch, January 12, 2018.
“Obamacare processing center to hire 600 in Wentzville,” St. Louis Post Dispatch, August 21, 2013.
“Blunt, Luetkemeyer escalate criticism of agency overseeing Wentzville Obamacare facility,” St. Louis Post Dispatch, June 24, 2014.
“Wentzville Obamacare contractor paid 13,000 hours of overtime,” St. Louis Post Dispatch, April 20, 2015.
“Employees out of work at company once subject of News 4 Investigation,” KMOV, July 28, 2017.