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Practice Management > Compensation and Fees

Ohio Regulators Investigate Benefits Brokers

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The Ohio Department of Insurance is still checking to see whether insurance brokers told government agency clients enough about their compensation arrangements.

Regulators announced Wednesday that 2 companies, units of UnitedHealth Group Inc., Minnetonka, Minn., and WellPoint Inc., Indianapolis, have signed consent orders resulting from allegations that brokers accepted compensation from the carriers while holding themselves out to be working solely interest of public entity clients.

In the consent orders, the companies have agreed to help the Ohio department “in any current or future administrative and/or criminal actions against any of its current or formerly appointed agents related to the improper conduct engaged in by those appointed agents with respect to compensation practices,” according to the texts of the consent orders.

The companies also have agreed to do a better job of complying with Ohio ethics rules.

The UnitedHealth unit, UnitedHealthcare of Ohio, has agreed to pay a $125,000 administrative penalty and $50,000 in administrative costs.

The WellPoint unit, Anthem Blue Cross and Blue Shield, has agreed to pay a $25,000 administrative penalty and $5,000 in administrative costs.

UnitedHealthcare neither admits nor denies the regulators’ allegations, according to the UnitedHealthcare consent order.

“We do not admit to any liability or wrongdoing,” Deborah Spano, a UnitedHealth spokeswoman, said in an interview.

UnitedHealthcare modified its broker compensation procedures and training in 2004, Spano said.

Anthem Blue denies the state’s allegations in its consent order and says it is entering into the consent order to resolve all outstanding disputes and avoid further compliance costs. In the Anthem Blue consent order, regulators acknowledge that the company “may have been unaware of the specific contractual arrangements between its agents and public sector entities.”

“Anthem is committed to conducting business with integrity and in accordance with federal, state and local laws governing our business activities and we will continue to operate in that fashion,” Chip Palazzo, an Anthem Blue spokesman, says in a statement.


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