[T]he Department of Financial Regulation issued a cease and desist order Wednesday against several groups that they say are deceptively marketing and soliciting unlicensed health insurance to Vermonters.
The order asks four groups — the Vermont Alliance for Health Care Alternatives; the group’s national organization, Small Association Leadership Alliance; the National Association of Senior Move Managers; and Sedera Health Inc.; as well as one individual, Susan Stasny, the Vermont chapter’s executive director — to stop selling the insurance immediately.
DFR Commissioner Michael Pieciak said all insurance companies, and all their products, have to be licensed in Vermont, which the VAHCA is not, making its existence a violation of state law.
He said that the law exists so that the state can ensure the financial strength of insurance companies, the fairness of their rates, and the extent of their coverage.
“In this case, this group of entities seems to be trying to skirt all those requirements,” Pieciak said. “That’s why we think it’s really important to protect Vermont consumers from any deception so that they don’t make any decisions they regret down the road.”
The way they’re deceiving Vermonters, he said, is by advertising a “VAHCA healthcare program” providing preventive care coverage and “medical cost sharing” provided by Sedera Health. He said the advertising is meant to mislead consumers into thinking the product is legitimate insurance that could replace “traditional” health insurance, all while lessening consumers’ financial risk.
But Pieciak said the way the advertising is done can make it very difficult to tell that what is being sold isn’t really insurance. VAHCA offers what it calls “preventive care” and “preventative claims,” it describes as an alternative to higher cost insurance, and it even has deductibles, Pieciak said.
“They have all these things like insurance companies would have,” he said. “But they don’t tell folks that they have no responsibility to cover any of your claims. Period.”
The VAHCA put out a press release in early July announcing its establishment, Pieciak said, after which point the DFR almost immediately began to receive emails asking about the groups’ legitimacy. He said after his staff had done their due diligence and learned enough to know that VAHCA was violating Vermont law, they ordered the cease and desist.
The groups have 30 days to petition the order, and have a hearing to determine whether they’re violating state law. But Pieciak said the DFR is pretty confident that in this case, the law wasn’t being followed.
“The next question is how many people were affected by this and then deal with that,” Pieciak said. “For now, that’s not information we have.”
The VAHCA did not respond to requests for comment Wednesday.