For Immediate Release - January 14, 2008

Insurance Commissioner Orders Unlicensed Health Insurer to Stop Advertising Fraudulent Policies

Division of Insurance alerts Massachusetts consumers to fax health care scam; offers tips on purchasing health insurance

BOSTON - Monday, January 14, 2008 - Insurance Commissioner Nonnie S. Burnes today issued a cease and desist order pdf format of HealthcareAllianceCeaseAndDesist.pdf citing several unlicensed companies for advertising fraudulent health insurance policies and urged consumers to think twice before purchasing health coverage from unknown organizations promoting low-cost premiums through fax, internet or mail solicitations.

The Division of Insurance had received consumer complaints in recent days about a company based in New Jersey using various names such as National Alliance of Associations, Association Healthcare and Promotion Healthcare. Various solicitations sent via fax urge consumers to call a toll-free number within a very short time frame in order to purchase "health coverage" for prices far below those being charged by legitimate companies in Massachusetts. Callers who contact the 800 number are asked to provide either their credit card information or to submit a copy of a check to the company via fax to cover the cost of the "coverage."

"This unscrupulous organization appears to be preying on consumers with promises of low-cost coverage that are incredibly misleading," said Burnes. "Now that Massachusetts residents are required to have health insurance, it is imperative that consumers understand what they are buying. The Division of Insurance is committed to fighting insurance fraud and helping consumers make informed decisions."

The Division's order directs the company to immediately stop advertising its health insurance policies in Massachusetts and to notify its policyholders that the Division has found the company to be in violation of state law. The order also notes that the company is not licensed to sell insurance and is engaged in unfair trade practices in the Commonwealth.

When considering buying health coverage, the Division of Insurance urges consumers to take the following steps:

  • Before buying coverage on your own, find out the name of the insurance company that is underwriting the health coverage.
  • Determine whether that company is authorized to issue coverage in Massachusetts to individuals and small employers by reviewing www.mass.gov/doi or contacting the Division of Insurance's Consumer Helpline at (617) 521-7794.
  • Do not respond to any offer that gives an unreasonably short-time frame for response. Under the Massachusetts Health Reform law, all insured health plans for individuals and small businesses are guaranteed issue, meaning that you can buy them at any time for coverage that will be available within the next month.
  • Do not send checks, credit card information, Social Security numbers or any other personal information through facsimile machines or to unknown web addresses.
  • Do not provide your credit card information over the phone.