Agent charged with theft and forgery; collected commissions for fictitious customers

A former Vancouver insurance agent has been charged with theft and forgery for allegedly collecting about $15,000 in commissions by creating fictitious applicants for insurance policies.

Julie Anne Goss, 43, an independent agent for AFLAC, was arraigned last week in Clark County Superior Court.

The scam came to light after the owner of a restaurant in Battle Ground, Wash. told AFLAC that she’d received premium bills for two “employees” that had never worked there. 

AFLAC investigated, and it turned out that Goss wrote dozens of policies for 15 people that either weren’t employees at the named businesses or apparently didn’t exist. In other cases, she wrote policies for real employees, but they said they hadn't applied for the coverage.

In each case, Goss stood to get a commission for the policy. All told, the investigator found, between August 2010 and January 2011, Goss wrote 91 fraudulent insurance policies and collected more than $15,000 in commissions for them.

The company canceled its contract with Goss in March 2011 and reported the matter to our Special Investigations Unit. After investigating further, we revoked Goss’ insurance license in January 2012. The charges against her were filed in late June.
If you suspect insurance fraud and you live in Washington state, please report it.

How to find an old life insurance policy (and other unclaimed property)

We get a lot of queries from people looking for old life insurance policies that they think might have named them as a beneficiary.

Here are some quick tips. For more specifics and links, please see our brand-new "how to find an old life insurance policy" web page.

• Try to track down as much information as possible. You'll presumably know the name of the policyholder (any name changes?), and it also helps to know the state or states that the person lived in.

• Ideally, you'll be able to locate a copy of the policy itself, which will have a number on it. But sometimes there's a wrinkle: the insurance company or its name may have changed, especially for older policies. That can be a challenge, but your state's insurance department can probably help you track down the current company information. If you live in Washington state -- we're the state insurance regulator there -- feel free to call us at 1-800-562-6900 and talk to our consumer advocacy staff.

• If you can't find the policy, try going through the person's financial records, looking for payments made to an insurer. Also, look through old mail: the company may have sent periodic statements or billing reminders. It's also worth checking with the person's auto- or homeowners insurers, since people sometimes buy life insurance from the same company.

• You could opt to pay a search company to run a check for the person's name through industry databases or send queries to a large number of insurers.

• If a policy goes unclaimed for a long time, insurers are supposed to turn the money over to state-run unclaimed property programs. They hold the money, often forever, in case someone files a claim. You can easily run the person's name through these free, state-run online search sites. Washington state's is at http://ucp.dor.wa.gov, and you can easily find other state's unclaimed property programs at www.unclaimed.org.

• One other important tip: Many life insurance policies automatically end at a certain age.  

COBRA and Medicare: How to avoid a common (and costly) mistake

If you're continuing your employer health coverage through COBRA and you become eligible for Medicare, it's important for you to sign up for Medicare during your Medicare eligibility period.

Here's why: Health insurers generally include language in their policies that says they can refuse to pay bills if they find out that you stayed on COBRA coverage after you were eligible for Medicare.

A lot of consumers get caught in this trap. Many people who are on COBRA don't know that they should sign up for Medicare when they become eligible. Instead, they assume that COBRA will continue to pay their medical bills, so they delaying signing up for Medicare until their COBRA coverage ends.

Then, months after becoming eligible for Medicare, they find out that their COBRA plan is refusing to pay for medical care that the consumer already received. They can't backdate their Medicare enrollment, so they're stuck with those medical bills. Yikes.

Don't get caught in this trap. If you're on COBRA and become eligible for Medicare, sign up.

"My doctor says I need a treatment, but my insurer won't cover it. What can I do?"

Q: "My doctor says that I need a particular medical treatment, but my health insurance company won't cover the cost. Is there anything I can do?"

A: Yes, there definitely is. Contact your health insurer, tell them you want to file an appeal, and ask what you need to do to start the process.

Then collect materials to support your argument, such as letters from your doctors describing why this is the best treatment for you, any medical journal articles or studies showing the treatment's effectiveness, etc.

You may also want to point out the health problems that will or can arise if the company doesn't pay for the treatment. Be sure to provide and estimate of the costs of treating those problems, especially if those costs would be significantly higher than paying for the treatment.

After you send in your appeal to your insurer, don't give up. Most people don't win the first round, but the odds of winning increase as you reach higher levels of appeals. The change of winning is highest when your appeal reaches the final level, called an "independent review organization."

For more tips on appeals, including templates, sample letters and detailed pointers, please see the appeals section of our website or call our consumer advocates at 1-800-562-6900. (If you live in a state other than Washington, please contact your own state's insurance department.)

Statement on U.S. House vote re: delaying the individual mandate

Note: The U.S. House of Representatives is scheduled to vote today on a bill that would delay for a year the individual mandate requiring most Americans to have health coverage starting in 2014. The penalty for not having coverage next year would be $95 or 1 percent of income, whichever is greater.

Statement from Washington Insurance Commissioner Mike Kreidler:

“Delaying the mandate would be unwise. This is an issue of personal responsibility. It’s unfair for people who can afford coverage to not have it, and to expect the rest of us to cover the cost of their care if they become seriously sick or injured. ”
“A critical part of the Affordable Care Act was the provision requiring that insurers take all applicants. No more screening out people because they have pre-existing medical conditions. But to make that work, you have to have as many people as possible in the insurance pool.
“Without an individual mandate to have coverage, people would likely just buy insurance when they knew they needed it. That’s like letting people get homeowners insurance only when their house catches fire.”

More states asking insurers if they're ready for climate change

From a press release we just sent out:

Insurance companies are facing growing scrutiny over their preparedness for climate change, an issue that could potentially affect insurance affordability and availability.

“I’m very pleased to see more states joining this effort,” said Washington Gov. Jay Inslee. “Being prepared is clearly in the best interests of both insurers and the families and businesses they insure.”

Last year, insurance regulators in Washington, California and New York surveyed major insurers about what steps they’re taking to address risks to their underwriting and investment portfolios.

This year, regulators in Connecticut and Minnesota have also joined the survey.

“Climate change is a potential game-changer for insurers,” said Washington Insurance Commissioner Mike Kreidler. “We want to make sure that this issue is on their radar.”

Climate change poses a double challenge to insurers. Extreme weather events and droughts, for example, can sharply increase claims. Climate-related issues could also have a significant effect on insurers’ investments, potentially affecting their long-term ability to pay claims.

“Unprepared insurers are much more likely to simply pull out of markets, leaving homeowners and businesses struggling to find alternative coverage,” said Kreidler, who chairs the National Association of Insurance Commissioners’ working group on climate change. “And when insurers abandon a market, government tends to end up as the insurer of last resort.”

Kreidler’s office has been surveying insurers on this issue since 2008.

“I wish some companies were further along,” said Kreidler, “but I’m encouraged to see that a growing number of companies are taking steps to incorporate climate change into their risk modeling and investment considerations.”

For a look at past surveys and responses for Washington, California and New York, please see California’s Climate Risk Disclosure Survey web page.

TRIA Captives and Republican Politics

With the current version of the Terrorism Risk Insurance Act (TRIA) set to expire at the end of next year unless Congress takes affirmative action to extend it, one thing has become clear already: the politics are complicated.   More specifically, the Republican caucus in the House of Representatives appears to be divided as to whether the federal government should continue to play a role in the private insurance marketplace.

Those with an interest in the continued viability of TRIA captives should pay attention because this is shaping up to be a very fluid and uncertain legislative process.  But before getting too far into the political weeds, a quick historical refresher would probably be helpful.

TRIA was first passed by Congress on a bipartisan basis in 2002 with the intent of helping to stabilize the property insurance marketplace in the aftermath of the 9/11 terrorist attacks.   The Act created a reinsurance program providing for a federal backstop for industry losses exceeding $100 million per year connected with future terrorist attacks.

The program details are that 85% of insured losses would be paid by the federal government after an insurer meets a deductible of 20% of annual premiums.    For losses up to $27.5 billion, the Treasury Department will collect 133% of payouts through surcharges on property/casualty policies.  Regulators have been given discretion to develop specifics to recoup payouts in access of $27.5 billion.

The Act was extended without much opposition in 2005 and 2007 so what’s different this time around?  Those votes were cast prior to the 2010 congressional election, which swept into office many “Tea Party” Republicans and Democratic control was upended in the House.

There is no shortage of commentary with regard to whether or not the growing influence of these small government true believers within the House Republican Caucus is good for the party over the longer term so this blog will refrain from offering similar political commentary.

What we can say with some certainty is the emerging debate over TRIA re-authorization is exposing the same type of divide among Tea Party and “establishment” Republicans that has been seen repeatedly over the past three years on high profile legislation.  Sometimes the party coalesced and other times it did not.

The current TRIA extension legislation (H.R. 508) is now pending in the House Financial Services Committee, which is chaired by Rep. Jeb Hensarling (R-TX).    While a member of the party leadership, his conservative political orientation more often than not synchs with the Tea Party Caucus.

Clearing Hensarling’s committee is the first step to final enactment, but while the congressman has not explicitly ruled out moving the legislation, he has signaled real skepticism of maintaining the federal government’s role in the private insurance market, even in the cases of terrorism.

In recent meetings with Republican members of the committee (most of whom were not in Congress when the law was originally passed in 2002), industry lobbyists have confirmed conflicting positions.   Some acknowledge that practical marketplace realities dictate the extension, while others have indicated they will oppose the legislation, citing the overriding priority of reducing the size and scope of the federal government.  For their part, House Democrats are mostly sitting back at this point while the Republican politics play out.   

Obviously there is still quite a bit of time on the game clock for congressional action and political ideology could very well yield to practical realities, but it’s risky to simply assume another TRIA extension will be pro forma.   After all, if Congress can go to the brink over raising the debt ceiling, tax hikes and budget sequesters, why should we think that H.R. 508 will be pushed over the finish line by the tailwind from previous years?

 

ACA Gobbles Up Self-Insurance Marketplace One Bite at a Time

This week’s announcement that the ACA’s employer-mandate provision has been postponed has understandably gotten a lot of attention.  It’s a big deal for sure, but while federal regulators punted on this high profile provision, they demonstrated no such caution with the release of two sets of final rules over the past week that will have the likely effect of eroding the self-insurance marketplace.

So while everyone is talking about the employer-mandate development, it’s important to interject some exclusive reporting and commentary regarding separate finalized ACA rules related to contraceptive coverage and student health plans to demonstrate how self-insurance options are being quietly restricted in certain market segments.

The rule-making process for contraceptive coverage has certainly attracted much attention over the past two years, but this blog is agnostic regarding the ongoing religious liberty debate that dominates the headlines.   We have, however, been very interested in how the final rules will affect self-insured religious organizations, of which there are many.

As some may recall, when the controversy originally erupted over the prospect of religious organizations being forced to provide coverage for contraceptive coverage, Obama’s political operatives quickly hatched a plan: insurance companies would be required to include this coverage at no cost to the religious organizations.

Notwithstanding the fact that this accommodation failed to satisfy religious liberty objections, the White House overlooked the fact that a large percentage of religious organizations operate self-insured group health plans, so the suggested insurance company fix would not apply to these plans.

Faced with this realization, regulators have floated various proposals during the rule-making process on how self-insured religious organizations can comply with the law.  Most of these proposals have been variations on the theme of forcing third party administrators to take responsibility for coordinating such coverage. 

For good measure, regulators offered a closing comment in the proposed rules essentially saying that such organizations can always convert to fully-insured arrangements if self-insurance is no longer viable.  You have to appreciate such bureaucratic thoughtfulness.

Based on the final rules released last week, it appears that the viability of self-insured plans will be significantly compromised.  At issue is that regulators are forcing TPAs to serve as plan fiduciaries solely for the purpose of arranging separate contraceptive coverage for plan participants.

Industry stakeholders have raised numerous concerns that such an approach is legally questionable and would expose TPAs to a variety of legal liability scenarios.  But the regulators flatly rejected these comments, asserting that “the Department of Labor’s view that is has the legal authority to require the third party administrator to become the plan administrator under ERISA section 3(16) for the sole purpose of providing payments for contraceptive services if the third party administrator agrees to enter into or remain in a contractual relationship with the eligible organization to provide administrative services for the plan.”  

Already acutely sensitive to potential fiduciary designations outside of the ACA context, it’s a reasonable conclusion that at least some TPAs will consider the new rules to be a tipping point, forcing them to part ways with their religious organization clients, which in turn will make it more difficult for such organizations to maintain their self-insured plans.

In separate news, CMS published the final rule last week clarifying exemptions to the individual mandate requirement in as provided for in the ACA.  As part of this, the rule also contained the final language on which "non-insurance” programs will be considered minimum essential coverage (MEC) for purposes of satisfying the mandate.

The earlier, proposed version of the rule had included self-funded student health plans in the list of allowable MECs.  Under the final version of the rule, however, self-funded student plans will only be considered MEC for plan years beginning before December 31, 2014.  After that date, such plans will have to apply to CMS to maintain the exemption.

Given the explicit goal of the Administration to steer as many young and healthy individuals into the exchanges as possible, this blog is highly skeptical that such exemptions will be forthcoming.  And of course, the real effect of this rule won’t be felt until after the 2014 elections. 

We’ll concede the fact that student health plans and religious organizations do not represent major segments of the overall self-insurance marketplace, but they are viable segments that are being quietly gobbled up by the bureaucracy.    So while everyone understandably is now talking about the employer-mandate delay, much of the real action continues to be in the details of the highly technical ACA implementation rules that cannot be easily distilled by the media nor understood by most health care reform observers.