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Texas Judge Blocks Unlicensed Health Plan

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NU Online News Service, March 11, 1:09 p.m. – A Texas district judge has ordered American Benefit Plans, North Richland Hills, Texas, to stop selling health care coverage to employers because it does not have the required Texas insurance license, according to the Texas Department of Insurance.

State District Court Judge Darlene Byrne of Austin last week issued a temporary restraining order against ABP and placed the company in temporary receivership, or a state of liquidation.

The Texas insurance department has contracted with Jack M. Webb and Associates Inc., Austin, Texas, to act as receiver in this case. In this role, the company pays assets and claims associated with receivership.

Bob Loiseau, a certified insurance receiver acting as special deputy receiver in this case, says ABP had put together unauthorized insurance plans or illegal ERISA benefit plans around the country.

“There are 25,000 to 30,000 lives ?insured’ by ABP,” he says. “They are concentrated in Texas and Florida. We believe there are as many as 30 other states that have enrollees.”

Byrne also froze the unauthorized insurer’s bank accounts and placed its books, records, assets and other funds under the control of Texas Insurance Commissioner Jose Montemayor, according to the Texas department.

ABP provides health coverage primarily under contracts with employers, according to the department.

“As medical costs rise, we are seeing a resurgence of unlicensed health plans that attempt to entice employers with lower-than-market rates,” Montemayor said. “These plans by-pass the normal licensing process for a reason — and it’s not a good one. Invariably, unlicensed health plans stop paying claims and leave their members with stacks of unpaid medical bills. It’s extremely important for employers to verify that a plan is licensed before signing up and paying premiums for coverage that may not be there when their employees need it.”

Employers and consumers can verify whether a health care plan or other insurer is licensed in Texas by calling the Texas Department of Insurance’s toll-free consumer help line at 1-800-252-3439.