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I know how difficult it is for you to find
affordable health care coverage for your employees. However, I am
very concerned that we are seeing an increase in individuals
marketing fraudulent health insurance plans. With the cost of health
care rising, promoters of health insurance scams are aggressively
targeting small businesses and their employees. Insurance scam
artists frequently masquerade as a federally regulated employer
trust, labor union, or a religious organization and claim to offer
low premiums because they are exempt from state insurance
regulation. Promoters of these scams also may induce insurance
agents to market their products to small businesses as an
alternative to traditional insurance coverage.
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President Bush strongly supports legislation to
strengthen and expand Association Health Plans to allow small
business to enjoy the bargaining power, administrative efficiencies,
benefit design, and risk pooling advantages currently available only
to large employers and union-sponsored plans. Until federal
legislative changes are enacted, employers can help ensure that
employees have the health care coverage they need by following the
attached tips. The U.S. Department of Labor and your state insurance
department are working to protect you and your employees, but you
also can help by taking extra precautions. |
I hope the tips below provide you with measures to
avoid being taken advantage of and other problems. I look forward to
working with you to ensure that access to affordable health care
coverage becomes a reality for small business. |
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Compare insurance coverage and
costs. Always compare the benefits and costs of multiple insurance
products. If one product appears to offer similar benefits at a
dramatically lower cost, ask questions.
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Confirm that the person offering the
product is a licensed insurance agent with a proven record of
reliability. Promoters of insurance scams often engage unlicensed
insurance agents to market their product as a cheaper alternative to
traditional insurance. Check out unknown agents with your state
insurance department.
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Verify that any unfamiliar company,
organization or product is approved by your state insurance
department.
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Examine the policy to determine the
actual coverage and whether the promised benefits are fully insured by
a licensed insurance company. Do not confuse representations about
stop-loss coverage with a guarantee of group health benefits.
Stop-loss coverage often protects only the issuer, not the insured
individuals.
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Request references of employers
enrolled with the provider and get information from employers about
benefit payment history and claim turn around time.
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Ask about the allocation of premiums
charged for commissions, fees and administrative expenses. Allocation
of a high percentage of the premiums to commissions, fees and
administrative expenses may indicate a problem with the product or
insurer.
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Contact your Regional Office of the
Employee Benefits Security Administration (U. S. Department of Labor)
through its toll-free number at 1.866.444.EBSA (3272) or at
www.askebsa.dol.gov to report problems.
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