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Gallagher Orders Fifth Unlicensed Entity to Stop Selling Bogus Health Insurance in Florida


Immediate Final Order

TALLAHASSEE -- Florida Treasurer and Insurance Commissioner Tom Gallagher has ordered American Benefit Plans, a Texas-based company that has operated in Florida under more than a dozen different organization names, to halt sales of its unlicensed health insurance products here. Some 13,000 Floridians are believed to have bought these unlicensed plans.

In an Immediate Final Order issued Thursday, the Department of Insurance charged that the Fort Worth company and its numerous affiliates improperly claimed a federal exemption from state licensure by operating "under the ruse" of various interest, trade and occupational associations. Among the products American Benefit Plans sold in Florida were UltraMedChoice Health Plan and UEVEBA.

The department earlier this month launched a media campaign warning employers and individuals to stay away from buying insurance from unlicensed entities. In addition to potentially being left with unpaid claims, many employers and individuals who have purchased unlicensed health plans have reported finding difficulty securing new coverage because of pre-existing conditions and the subsequent lapse in continuous coverage. This is the fifth unlicensed entity since February 2001 that Gallagher has taken action against.

"These cases point to a need for consumers and agents to be on the lookout for bogus companies offering health coverage that is really just an illusion," Gallagher said. "Employers and consumers must take the time to be sure they are dealing with a licensed insurance entity."

Unlicensed entities do not participate in a state guaranty fund, which covers unpaid claims in the event a licensed insurer goes bankrupt. The state of Texas is now taking action against the company and has established a website,, to assist policyholders and providers.

Unlicensed "insurers" lure employers and individuals with low rates for health coverage, often through slick TV or radio advertising and sales representatives who may be licensed insurance agents.

The federal Employers Retirement Income Security Act (ERISA) allows under certain circumstances an individual employer, union or association to establish and self-insure a health plan for its own employees or members, without state licensure. However, American Benefit Plans offered coverage to unrelated employers and consumers, more like a Multiple Employer Welfare Arrangement, which does require licensure.

Florida's order requires American Benefit Plans to give notice in writing to every policyholder and beneficiary that they need to secure new health insurance coverage. In addition, every agent and broker that sold its products must offer to place every policyholder in a substantially comparable plan from a Florida-licensed insurer or health maintenance organization. American Benefit Plans also has 15 days to provide the department with records and an accounting of all premiums and "association" dues collected in Florida.

Unlicensed entities often operate through a maze of organizations and individuals, creating confusion about who is responsible for paying claims. The order names several individuals throughout the country and 26 agents, agencies and third-party administrators in Florida linked to these plans. Names associated with American Benefit Plans include:

United Employers Voluntary Employee Beneficiary Association

United Employers Voluntary Employee Beneficiary Association I

National Association for Working Americans

National Association of Working Americans

American Association of Agriculture, Forestry and Fishing Workers

American Association of Transportation, Communication, Electrical, Gas and Sanitary Workers

American Association of Wholesale Trade Workers

American Association of Manufacturer Workers

American Association of Service Workers

American Association of Professional Workers

Electronic Benefits Group, Inc.

Enhanced Health Management

The Four Corners Company, LLC

Four Corners Company, LLC

Four Corners Co., LLC

The Legislature this year passed a law increasing the penalty for a licensed agent selling unauthorized insurance from a first-degree misdemeanor to a third-degree felony, punishable by up to five years in jail. Under Florida law, if an unlicensed insurer fails to pay claims, agents who sold the unlicensed coverage may be held responsible for unpaid claims. The vast majority of Florida agents do not sell these unlicensed products.

Employers and individuals shopping for health insurance coverage are urged to check with the Department of Insurance to be sure they are dealing not only with a Florida-licensed insurance company but also with a Florida-licensed insurance agent.

The department's Consumer Helpline, at 1-800-342-2762, is staffed Monday through Friday from 8 a.m. to 7 p.m. A copy of the Immediate Final Order and additional attachments can be found at under News Releases.