Fraud against the elderly
Seniors are often victims of insurance fraud, particularly life and health insurance fraud. Seniors often think they need these coverages, and many of these people worry that they don’t want to be a burden to their families if they don’t have enough insurance.
Prevention tips:
Beware of agents who:
- They contact you without your request. The seller probably got your information from some mailing list. Not all agents who contact you are dishonest, but it’s a good idea to be careful.
- They use high-pressure tactics. Common tactics include offering him a “last chance offer” or appealing to his emotions. Take your time when deciding to buy the insurance and base your decision on your financial needs.
- They pressure you to take money out of an existing annuity or life insurance policy you have to buy a new annuity, life insurance policy, or other investment. Annuities and life insurance generally have more value the longer you have them. Switching to a new annuity or policy during the first three to five years can cause you to lose money.
- Tell you they are from Medicare, Social Security, or another government agency. The government does not sell insurance. Agents claiming to be associated with the government are breaking the law.
Fraud against businesses
Businesses with risks that are difficult to insure and small businesses that have difficulty affording coverage can be vulnerable to insurance fraud.
Unlicensed companies often try to sell fraudulent insurance policies to businesses. An unlicensed insurance company may claim to be associated with a labor union, trust, or MEWA (Multiple Employer Welfare Agreement). MEWAs are groups that allow small companies to pool their resources to purchase affordable health plans. Like insurance companies, MEWAs must be licensed to do business in Texas.
A fraudulent company could also claim that your plan is exempt from state regulations because it is a self-funded plan or an ERISA plan. ERISA plans are plans authorized by the Employee Retirement Income Security Act. While it is true that ERISA plans are exempt from most state laws, businesses and organizations create them to cover their employees or members. Rarely will your business be sold a valid ERISA plan from an outside company or agent.
Unlicensed insurance companies may also try to sell the following types of policies:
- Medical malpractice.
- commercial general liability.
- performance bonuses from a contractor.
- Liability coverage for truck drivers.
Prevention tips:
- Beware of unsolicited offers or offers to increase coverage.
- Check with TDI for the license or registration status of surplus or offshore lines for the companies you are considering.
- When you shop for health insurance, ask the plan to provide you with references from other enrolled employers. Ask those employers about the plan’s benefit payment history and claim resolution time.
Health services fraud
TDI licenses insurance agents, brokers, and companies. Consumers can use an insurance agent or broker to help them shop for health insurance. To check the license status of an insurance agent or company, call the TDI Consumer Help Line or visit our website.
The federal government oversees navigators and counselors who help consumers buy insurance in the federal insurance marketplace. To verify that a Navigator or Counselor is certified by the federal government, call the Federal Marketplace at 800-318-2596 or visit HealthCare.gov.
Prevention tips:
- Beware of fake health insurance websites or marketplaces that collect your personal information. Make sure the insurance company you buy from actually exists and is licensed.
- Don’t feel pressured to change coverage. If you already have health insurance through your employer or Medicaid, Medicare, CHIP, or TRICARE, you are not required to change plans.
- Be wary of unsolicited emails, phone calls or letters, and people who come to your home uninvited. Do not give your Social Security number or other personal information to anyone you have not contacted.
- Ask questions if you don’t understand something and take notes. Write down the names of the people you talk to and write down what they say to you. Get their phone numbers, addresses and emails.
- Take your time to decide. Don’t buy anything from people who try to talk you into making a hasty decision.
- Don’t feel pressured to buy coverage. You are not required to have proof of insurance card. You can’t go to jail for not having insurance.
- Don’t sign anything you haven’t read or don’t fully understand.