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Dozens of companies selling bogus health insurance plans have left tens of thousands of people without coverage and with millions in unpaid medical bills. They target the self-employed and small-business owners desperate for affordable coverage.
Typically promoted as "union plans" or "association plans," these fake programs generally promise very low rates and say they do not need a state license because they are regulated by the U.S. Department of Labor under the pension law known as ERISA. Not so.
The plans often use a small portion of premium dollars to pay some of the least expensive claims. Patients and doctors are stuck with the unpaid bills and, possibly, a damaged credit rating.
For example, last year Employers Mutual LLC and the National Association for Working Americans sold nonexistent health insurance to more than 50,000 workers and family members, according to John Morrison, the Montana Insurance Commissioner. The workers and their families were left without health insurance and with an estimated $65 million in unpaid medical bills. Employers Mutual LLC operated in every state; the National Association ...