NU Online News Service, Aug. 13, 8:57 a.m. – Texas Insurance Commissioner Jose Montemayor has fined United Wisconsin Life Insurance Company, Green Bay, Wis., $35,000 in connection with charges that it overcharged small employer health insurance plans, according to the Texas Department of Insurance.
Montemayor also ordered the company to pay restitution estimated at $710,000 to the plans that were allegedly affected.
United Wisconsin consented to paying the fine and restitution without admitting any violations of Texas laws or regulations.
At the end of 2000, United Wisconsin insured more than 10,000 Texas residents through 1,697 small employer plans. Premiums from these plans totaled $40.5 million, the Texas department says..
The company was the first to be fined since Montemayor announced a stepped-up effort in March to stop what he said were illegal pricing practices that discouraged very small employers from buying health insurance.
The Texas department says Texas laws put strict caps on the factors carriers can use to calculate premium rates for small employee health plans.
One provision, the “group size rating factor,” allows carriers to charge extra for very small plans to account for extra administrative costs.
But the biggest group size rating factor a carrier adds to premium rates cannot exceed the lowest group size rating factor by more than 20%, the Texas department says.