The Texas Department of Insurance (TDI) has issued a reminder to insurance companies, agents, and marketers of discount healthcare programs that materially misrepresenting the terms and conditions of an insurance policy or contract is grounds for disciplinary action.
Examples of conduct that TDI may investigate include:
- Representing that a plan provides benefits that it does not.
- Selling or offering multiple plans to an individual as part of a single transaction in a manner that may mislead a reasonable person.
- Using terms that create a false implication or may be misleading or deceptive, such as:
- “bronze,” “silver,” “gold,” “platinum,” or “essential health benefits” to describe the coverage or benefits in an excepted benefit plan (i.e., one that is exempt from federal rules for major medical coverage) or discount health care program;
- “PPO” to describe the coverage or benefits included in an excepted benefit plan or discount health care program that is not regulated under Insurance Code Chapter 1301;
- “copay,” “coinsurance,” “first-dollar coverage,” or “covered expenses” to describe the coverage or benefits included in a fixed indemnity plan or discount health care program; or
- “comprehensive,” “major medical,” “ACA-compliant,” or “minimum essential coverage” to describe the coverage or benefits included in an excepted benefit plan or discount health care program.
- Misrepresenting the applicability of the federal open enrollment period to excepted benefits and discount health care programs.
- Making a misrepresentation that health insurance rates will change if the consumer does not make an immediate purchase.
- Failing to explain the difference in an excepted benefit plan and major medical coverage to a prospective buyer.
TDI reminds insurers that certain conduct may be considered an unfair method of competition or an unfair or deceptive act. TDI also reminds insurers that they should monitor their agents to prevent deceptive or misleading marketing. Examples of conduct that TDI may investigate include:
- Selling an excepted benefit plan through an association or group, unless the group complies with Insurance Code Chapter 1251.
- Using advertising that does not comply with Texas Insurance Code Chapter 541, Subchapter B-1 and 28 Texas Administrative Code Chapter 21, Subchapter B.
TDI reminds agents and insurers that “spoofing” phone numbers on a call recipient’s caller ID display violates Business and Commerce Code Section 304.151. TDI will refer such complaints to the Public Utilities Commission.
Sanctions and penalties for marketing violations and related issues can include issuance of cease and desist orders, fines, and suspension or revocation of agent licenses or other types of licenses. If warranted, TDI will make referrals to the appropriate criminal authorities for further action.
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