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Company Ordered to Cease Doing Business in Nevada: Medical Discount Plan Not Registered

4/17/06, Carson City, NV – State Commissioner of Insurance Alice A. Molasky-Arman has ordered American Benefits PPO of Houston, TX and RSA Marketing of Las Vegas, NV to stop offering discount health plans in Nevada. Neither company is registered in Nevada as a medical discount plan, which is in violation of state law.

Division of Insurance investigators received information that these entities were offering, marketing and soliciting medical discount plans through facsimiles. The advertisement claimed to offer “ulimited PPO savings nationwide” for $59.95 per month, among other benefits.

“I will not tolerate illegitimate entities taking advantage of Nevada consumers. It is also unfair to entities that abide by the law and have registered with the Division,” said Molasky-Arman.

AB 338, approved by the 2005 Legislature and signed into law by Governor Kenny Guinn, requires entities that provide discounts on health care and services to be registered with the Division of Insurance before conducting business in Nevada. Medical discount plans typically promise that for a monthly or yearly membership fee, consumers who enroll in the plan will save money on health care products and services, such as prescriptions and doctor visits. Consumers who purchase a medical discount plan are simply buying a discount for health care fees. To date, the Division has registered ten medical discount plans.

Medical discount plans are not insurance, even though they are frequently confused with health insurance. Sometimes, plans use marketing ploys and insurance terms to lead consumers into believing they are purchasing an insurance policy. Consumers who purchase medical discount plans (provided the plans are legitimate) will receive discounts for certain health care services, but are still responsible for all medical bills.

“Before signing up for a plan or purchasing a product, consumers are strongly encouraged to check to see whether the product or company is authorized by the Division,” said Molasky-Arman.

If, after a holding a public hearing, the entities are found guilty of operating without proper registration, the Commissioner may impose administrative fines of $2,000 per act or violation.

To verify whether a company is authorized by the Division of Insurance, please call statewide toll-free at 1-888-467-4195, or log on to www.nvinsurancealert.com. If you or someone you know has been approached by these entities or if you believe you have been victimized by other insurance scams, you are encouraged to call the Division of Insurance at (775) 687-4270 in Carson City, (702) 486-4009 in Las Vegas, or the statewide toll-free number (888) 872-3234. Additional tips can be found on the Division’s Web site by clicking on to http://doi.state.nv.us.

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