Arkansas Gets Tough on Illegal Plans

June 9, 2003

Cracking down on a number of illegal benefits plans that have cropped up in his state, Arkansas Insurance Commissioner Mike Pickens revoked the licenses of four insurance agents who sold or were involved in the marketing of an unauthorized health plan and, in a separate action, informed enrollees in Benefit Plans of America Inc. that they should immediately seek to find new dental coverage.

According to the Arkansas Insurance Department, Pickens revoked the insurance licenses of former agents Billy Dean Mullins of Conway, Cassondra Ann Kimble, John Anthony Markovich, and Helen Marie Markovich, all of Pocahontas, for their involvement with TRG Marketing LLC.

TRG Marketing was ordered in 2002 to cease and desist operating in the State of Arkansas due to the company’s sale of an illegal health care plan. The company had claimed the multiple employer welfare arrangement (MEWA) plan to be set up pursuant to the Employee Retirement Income Security Act (ERISA) and was therefore exempt from state regulation. The department says that claim was proven to be untrue.

As for the dental plans, the insurance department is conducting an investigation into the operations of Benefit Plans of America, Inc., which among other things was found to be operating illegally in the State of Arkansas.

“Many Arkansas members enrolled in this Plan have reported difficulty in getting dental claims paid,” Commissioner Pickens said. “We have received reports, which indicate the Plan is five months behind in claims payments.”

According to a notice sent by Pickens to those enrolled in the plan, the Arkansas Insurance Department has learned that Benefit Plans of America Inc. may have been marketed as a Federal ERISA plan, exempt from State regulation. However, to date, the Insurance Department has found those claims to be false.

“A significant problem with illegal health plans, in addition to problems with claims payments, is the lack of guaranty funding,” Pickens stated. “If a plan operating illegally in the State is found to be financially insolvent, a guaranty fund is not available to make claims payments to the enrollee or to the provider. In most cases the enrollee becomes totally responsible for paying the claims, making the coverage purchased worthless.”

Over the past several months a number of illegal health plans have been discovered to be operating in the State of Arkansas. For warning tips against illegal and unlicensed plans visit the Arkansas Insurance Department’s Web site at www.state.ar.us/insurance. The Insurance Department’s Consumer Services Division may also assist with questions regarding licensed companies and may be reached at (800) 852-5494.

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