DOI ISSUES CEASE & DESIST ORDER:

North Dakota Insurance Commissioner Jim Poolman issued a cease and desist order against Choice Benefits, a Houston, Texas-based company that was marketing “discount health plans” in the state.

Choice Benefits had advertised in North Dakota, violating a new state law aimed at curbing abuses in the marketing of discount medical plans. Poolman warned consumers to be aware of Choice Benefits and similar companies that may be trying to market these types of plans throughout the state.

Poolman’s order alleges that Choice Benefits’ advertisement failed to disclose that the discount medical plan was not an insurance policy; it used misleading terminology that could cause a consumer to believe the plan was insurance; it failed to disclose that plan members are obligated to pay for all health care services, but will receive a discount from those health care providers that have contracted with the discount medical plan organization; and finally, the advertisement failed to include the name and address of the marketer and of the discount medical plan organization.

The Choice Benefits cease and desist was the first such order issued under the new law, which was passed during the last legislative session.

“These plans are not health insurance–they aren’t even close, and these companies should not be tricking North Dakotans into believing that they are,” Poolman said.

Typically, discount medical plans claim that by seeking services from participating providers the bills for dental work, prescription drugs, or even medical and hospital care will be significantly discounted, Poolman said. However, most of these plans have few, if any, participating providers in the state.

Poolman warned that before purchasing a discount medical plan, consumers should check the plan’s list of providers to make sure they are located in their community or surrounding area.