Health Insurance

Advisory on making the best of Health Insurance

Insurance fraud costs consumers—businesses included. In fact, it can inflate premiums by as much as 30 percent.

Small-business owners often have trouble obtaining affordable health insurance coverage for themselves and their employees. Where SBOs are in need of health insurance, dishonest predators will invariably come out of the woodwork to take unfair advantage, which is one reason why health insurance fraud is a growing problem in this country. Health insurance fraud usually involves group health plans sold to employers for their employees. Posing as legitimate-sounding unions or trade groups, or claiming the backing of big insurers, such health insurers prey on employers who are badly in need of health insurance by, for example, offering low-cost health care coverage—as much as 50% or more below the going rate. Some even say they’ll issue coverage regardless of health conditions, and with little or no underwriting.

Companies and individuals behind these health insurance schemes are seldom licensed in the states in which they do business, and they operate by recruiting unwary local agents to sell these fraudulent products to trusting clients. By putting out false information, undercutting rates and competing unfairly with licensed carriers, unauthorized insurance scams are bilking their customers, and constitute a serious financial hazard to the general public.

Heed the Warning Signs

Businesses having difficulty obtaining health insurance coverage need to look before leaping at health insurance offers that sound a bit too attractive. Business owners (and producers) are well advised to get references, get details, and talk to their legal advisors.

Look Before You Leap

Here’s how to make sure a health insurance plan is being marketed by a licensed insurer:
• Ask for the insurer’s name and check the benefits booklet to see if it names a licensed insurers.
• Verify claims that a reputable insurance company is backing the plan by contacting the company.
• Contact the insurance department to verify the credentials of the insurance company.