Insurance Law

California Department of Insurance Taking Proactive Enforcement Steps to Protect Consumers with Rollout of Healthcare Insurance Reform

As the implementation of the Affordable Care Act (ACA) moves forward, and the October 1 launch of the state health benefit exchange (Covered California) nears, California Insurance Commissioner Dave Jones is reminding consumers to be vigilant about protecting their personal and financial information and verifying they are using official government websites or working with certified enrollment counselors or licensed health agents when shopping for health insurance coverage.

"We want consumers to know that they can go to Covered California to shop for new health insurance products and learn if they are eligible for federal premium subsidies that will make insurance more affordable," said Commissioner Jones.

One of the most significant components of the ACA is the creation of a new health benefit exchange; however, bogus websites attempting to associate themselves with the new health exchange have been appearing online for more than a year. Some of these online portals instruct consumers to enter personal information to learn about new health insurance products. Insurance Commissioner Jones warns consumers who want to shop through Covered California not to enter any personal or financial information into a website without first verifying they are in fact on the official Covered California website.

"Our focus is on educating and protecting consumers as we rollout healthcare reform, so we want to make sure that consumers work with Covered California, its enrollment counselors or health agents licensed by the Department, not imposters who seek to prey on those who want to sign up for insurance coverage," explained Commissioner Jones.

The Department of Insurance is already working proactively to identify potentially inappropriate websites that may mislead or misinform consumers. The department has succeeded in getting some websites taken down and others to change their misleading content. Additionally, the department's licensing bureau has denied more than 150 license applications for business names designed to market health coverage services because the proposed names could confuse or mislead the public into believing they were actually California's health benefit exchange - Covered California.

"Healthcare reform has brought and will continue to bring many new benefits to Californians, but unfortunately as with any new program, there are those who will use the new system to take advantage of or rip-off consumers. I have zero tolerance for anyone that takes advantage of consumers or preys on the vulnerable. My enforcement teams will continue to investigate complaints and tips, and work with local district attorneys to prosecute anyone who violates the law."

The best way to protect yourself from scams or rip-offs is to research the agent or company you are considering. You can call the California Department of Insurance Consumer Hotline 800-927-HELP to ensure that the agent and company are licensed to write insurance or contact Covered California at (800-300-1506).

Important "red flags" for consumers to watch out for:

1. The salesperson says the premium offer is only good for a limited time.

Enrollment in the exchange will be open from October 1 to March 31, and rates for plans in the exchange will last for the entire enrollment period. Be skeptical of someone who is trying to pressure you into buying a policy by claiming the rate is only good for a short time. Remember, if the offer sounds too good to be true, it probably is.

2.  The salesperson says you could go to jail for not having health insurance.

Starting in 2014, all Americans will be required to have health insurance. You will not face jail time if you do not purchase health insurance. However, those who remain uninsured and do not qualify for any exemptions will face a penalty of $95 (for each adult) or 1 percent of family income, whichever is greater. In 2015, the penalty will increase to $325 per adult or 2 percent of family income, and in 2016 and beyond, the penalty will be $695 per adult or 2.5 percent of family income. For more information on the individual shared responsibility provision of the ACA, visit the Internal Revenue Service website.

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