Oregonians should be cautious before purchasing health insurance coverage through misleading “self-funded” or “limited partner” plans that can result in high out-of-pocket costs and unexpected medical bills, state insurance regulators said.
The Oregon Division of Financial Regulation in arecent press releasewarned that companies may offer plans to Oregonians by classifying them as “limited partners” or “employees” to avoid state law guaranteeing consumer protections. The message comes after the agency approved a nearly22% increase in premiums for individuals using the state’s health insurance marketplace and a 15.5% increase for small businesses.
Typically, self-funded plans involve employers who take on the risk of insuring their employees’ claims rather than paying lump-sum premiums to insurance carriers. These employers often obtain stop-loss insurance to guard against expensive surges in claims.
More than 25% of businesses in the state offer at least one of these types of plans to their employees, according tofederal datafrom last year. These plans are regulated under the federal Employee Retirement Income Security Act rather than state insurance law.
But that also makes these arrangements vulnerable for misuse by companies who are not serious employers seeking to cover their companies. Oregonians may be attracted to the low cost, but plans from these companies often end up only offering substantial coverage for checkups and routine screenings, according to state regulators.
“Consumers should remember the adage that if a deal looks too good to be true, it probably is,” Oregon Insurance Commissioner TK Keen said in a statement. “If a health insurance policy offers unusually low premiums and low deductibles, yet promises full or unlimited coverage, be skeptical.”
The warning from state insurance regulators comes as open enrollment for Oregonians who do not obtain health insurance through their employer, Medicare or the Oregon Health Plan approaches beginning Nov. 1. Plans that comply with the federal Affordable Care Act are available through licensed insurance agents or Oregon’s health insurance marketplace, which operates on an official “.gov” website.
In the meantime, other “red flags” state regulators said to watch out for include salespersons claiming they do not need a license because their product is not insurance, cheap plans that reference “stop-loss” insurance or a company attempting to delay or deny claims while making excuses about failing to pay for them.
Oregonians who believe they may have been deceived can contact consumer advocates with the state at 1-888-877-4894 (toll-free) or emaildfr.insurancehelp@dcbs.oregon.gov.State regulators also encourage people to request their insurance agent’s full name and National Producer Number, which can be verifiedthrough a database hosted by theNational Association of Insurance Commissioners.
A list of companies that advertise these risky plansis availablehere from the financial regulation division.
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