Health insurance scams are going past the point of Fraud and bordering on point of epidemic. Unlicensed health insurance companies lure as many people as possible with cheap rates and keep them paying premiums for as long as possible. When claims get substantial or regulators catch on, they shut their doors and skip town, leaving the unsuspecting consumer with a pile of unpaid medical bills.

"We are at the beginning of a real crisis: an unprecedented influx in unauthorized insurers selling phony health insurance," says Mila Kofman, a researcher at the Georgetown University Health Policy Institute. For example the four biggest unauthorized insurers have left at least 100,000 victims with over $85 Million in unpaid medical bills. Hopefully you've never heard of or written a check to American Benefit Plans, Employers Mutual, or TRG marketing.

SO HOW DO I PROTECT MY EMPLOYEES?

First of all, do business with an reputable insurance agent. You can check out status of an agent's license by going to the Texas Department of Insurance website (See TDI Agent Search Link). Additionally, go by their office to see that they are indeed an established company. Ask to see a copy of their Errors & Omissions coverage which can provide you with financial recourse in the event that an agent's misrepresentation causes you financial harm

But don't stop there. Even licensed agents have sold unauthorized health plans. TDI maintains very relevant information about a carrier including licensing status, financial information, complaint ratios, as well as information on fines or violations a company might have been slapped with. (See TDI Carrier Profile Link). You should also check the financial ratings of the company by going to sites such as AM Best and Standard & Poors.

Taking a few minutes to check out who your dealing with can make the difference between sleeping soundly at night and being stuck with a handful of unpaid medical bills. As always, if you have questions or comments, or would like a free risk assessment for your business feel free to contact me at 512-338-0100 or cbaumli@sbcia.com.