Watch Out for Health Insurance Scams

Providing health insurance coverage for your staff is enough to send you home with a headache.  It’s way too expensive to buy good coverage, but you’ll never get the best employees if you don’t.  Shopping for it takes time away from running your business.  And to make matters worse, you have to be a genius to understand the difference between plans.

Sadly, there are unscrupulous people out there taking advantage of the situation.  According to the Department of Labor’s Elaine L. Chao, "we are seeing an increase in individuals marketing fraudulent health insurance plans. With the cost of health care rising, promoters of health insurance scams are aggressively targeting small businesses and their employees. Insurance scam artists frequently masquerade as a federally regulated employer trust, labor union, or a religious organization and claim to offer low premiums because they are exempt from state insurance regulation."

Here are some tips to help you avoid being victimized:

  • Compare plans and costs.  The insurance industry is very competitive.  If the price seems too good to be true, it probably is.  Remember, free lunch.
  • Make sure the salesman is a licensed insurance agent.
  • If you’ve never heard of the company, check with your state insurance department.
  • Read the details of the policy.  If you don’t understand it, have your lawyer review it.
  • Ask for names of other businesses who have bought the plan.
  • Contact your Regional Office of the Employee Benefits Security Administration (U. S. Department of Labor) through its toll-free number at 1.866.444.EBSA (3272) or at to report problems.

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