MORRISON ORDERS SHUT-DOWN OF ALLEGED FAKE INSURANCE SCHEME IN MONTANA
Fines of up to $25,000 per violation could be imposed
Montana State Auditor John Morrison has ordered a Florida man, several other individuals and an affiliation of companies operating across the nation to stop selling unlicensed association health plans in Montana. Companies selling medical care discount products bundled with insurance products are required to obtain a certificate of authority and a certificate of registration from the Montana Department of Insurance before selling their products. Additionally, agents selling insurance products must be licensed with the state.
“These companies are not licensed to sell insurance or medical care discount cards in the State of Montana.” Morrison said. “Simply stated, these people and their companies are scamming Montana consumers under the guise of offering inexpensive health insurance coverage.”
Morrison’s office launched an investigation into the companies after receiving complaints from policyholders who had purchased the Adova Health plan and experienced trouble over claims, premiums, benefits and other issues. Companies and their principles named in the cease-and-desist order for unregistered activity include:
- Adova Health, Family Security Council, Inc., New Health Care Management Group, Inc., Ira Gottlieb, John Byars, Arnold H. Katz and Consumer Alliance USA;
- United Group Programs, Inc., United National Workforce Association, Opti-Med, C. Murphy Leopold, Edward Demming, Walter Cecchini and Jonathan Edelheit;
- Seventeen other named respondents.
Morrison also initiated steps to suspend or revoke the Montana license of Robert D. Edelheit of Boca Raton, Fla., an insurance agent in Florida who participated in the alleged unauthorized insurance transactions of the companies named in the cease-and-desist order. Additionally, the Department of Insurance is asking that the Commissioner require the respondents to pay fines and full restitution to Montana victims.
Investigators for Morrison said that between 2005 and 2007, the companies may have sold bogus health products to more than 200 Montana residents. After people purchased the products from unlicensed insurance agents, they were told that they had been automatically enrolled in the United National Workforce Association. According to the order, the companies made false, deceptive and misleading representations to consumers about the plans that they were marketing and selling.
“With insurance premiums on the rise, consumers are searching for ways to obtain medical care coverage at a manageable cost,” said Morrison. “These companies are preying on folks who are trying to find alternative solutions to the high cost of heath insurance. Our main goal is protecting Montanans while aggressively pursuing bad actors in the industry who are exploiting the health care crisis facing consumers.”
Oftentimes, fraudulent companies pocket the payments from consumers and rarely provide reimbursement for any medical conditions or do not provide the coverage promised. Consumers should be on the lookout for red flags that can indicate bogus deals. For instance, consumers should be wary of unsolicited offers, often faxed or made by telemarketers. In addition, any offer to provide health insurance must contain the name of the insurance company providing the coverage.
Morrison’s order instructs the respondents to provide the Office of the Insurance Commissioner with a list and contact information for all Montana residents who received an unauthorized insurance policy, plan or insurance-related solicitation during the past 10 years. The State of Washington recently took similar action.
Before making a decision on health insurance and discount cards, Morrison urges Montanans to first verify the legitimacy of a health insurance product by contacting the Policyholder Services Bureau of the State Auditor’s Office toll-free at 1-800-332-6148 or in Helena at 444-2040. “Fortunately, Montana law gives us the tools to crack down on phony health insurance products,” said Morrison. “My office can also help Montanans make smart choices about insurance and medical discount cards – but people need to pick up the phone and call us to check out an offer before moving forward.”
Montanans who have information or who may have been solicited by Adova Health or any of these companies or individuals are asked to immediately notify the State Auditor’s Office by calling toll-free at 1-800-332-6148 or in Helena at 444-2040.