Insurer canceled for sub-standard plans; clients will get Healthcare.gov enrollment option

By: - March 23, 2022 6:30 am
Healthcare.gov-Screen shot

A screenshot of Healthcare.gov, the federal health care marketplace under the Affordable Care Act.

A company that sold health insurance plans to as many as 900 Wisconsin residents is out of business in the state, and the federal government is preparing to offer former clients an opportunity to sign up for health insurance under the Affordable Care Act (ACA).

Dates of the special ACA enrollment period for former customers of Salvasen Health LLC haven’t been announced yet, but that announcement is expected soon from the federal government, Wisconsin Insurance Commissioner Nathan Houdek said Tuesday.

Wisconsin is one of several states, including Minnesota and Nevada, taking action against Salvasen Health for selling health plans that don’t meet the minimum standards of the ACA. The company, based in Houston, Texas, sold policies in Wisconsin without being licensed here, in violation of state law.

The state Office of the Commissioner of Insurance (OCI) assessed a $14,000 forfeiture against Salvasen and barred it from selling new policies or renewing existing policies in the state. 

Over the course of Salvasen’s operation in the state, the company signed up 900 policy holders, said Sarah Smith, OCI’s director of communications. When the company terminated its policies Dec. 31, 2021, there were 212 active Wisconsin policy holders.

The OCI’s order directed at Salvasen describes five separate complaints filed with the agency against the company. One consumer looking for health coverage under the Affordable Care Act and Googled “ACA.” An insurance agent subsequently called and sold the person four policies, “but when he received the ‘membership card’ from [Salvasen] it stated ‘THIS PLAN IS NOT ACA COMPLIANT,’” the order states.

Another consumer described difficulty in getting claims paid “and concluded the insurance coverage ‘has been a total fraud,’” according to the order. A third person complained that an insurance agent told him he was purchasing a plan for catastrophic coverage; the client learned the plan was a limited benefit policy after his spouse was hospitalized. 

A fourth consumer reported to the OCI that the company had “paid nothing” after having advertised 100% coverage for preventive services. A fifth client reported difficulty canceling two policies she had purchased but subsequently decided the coverage wasn’t what she had expected it to be.

In December Salvasen told its Wisconsin policyholders it would cancel their coverage at the end of the month. 

Executives for Salvasen Health could not be reached Tuesday. The company’s website lists only a customer service number, which did not take a voicemail message, and a customer service email address, which returned an automatic message that there would be “48-72 hours for a response.”

Smith said that Salvasen sold policies through unaffiliated agents and third-party administrators. 

In an interview, Houdek told the Wisconsin Examiner that Salvasen sold minimum-coverage health plans. “Consumers were also misled to believe they were buying plans in compliance with the Affordable Care Act, which they were not,” he said.

The insurance commissioner said that the federal Center for Medicare & Medicaid Services (CMS) will open a special enrollment period to allow people who had purchased a Salvasen Health policy to buy a health plan on the federal health insurance exchange, Healthcare.gov, that meets ACA standards.

Other states that have taken action against Salvasen but that have their own state-based health insurance exchanges have been able to move faster with a special enrollment period, Houdek said. A state-based exchange would also make it possible to do “more targeted outreach” to people in need of health insurance, he added.

Gov. Tony Evers had included in the 2021-23 state budget proposal a provision to transition Wisconsin’s ACA health insurance exchange to a state-based platform from the federal one, but the Republican majority in the Joint Finance Committee of the Legislature removed that item.

Houdek said that one lesson from cases such as that of Salvasen Health is that people buying health insurance should use reliable channels. 

“It is important that when people are shopping for and purchasing health insurance coverage, they make sure they are buying ACA-compliant coverage,” Houdek said. “The best way to do that is through Healthcare.gov.”

He said his office encourages consumers who have problems with an insurer or an agent to file a complaint with OCI so that the issue can be addressed.

Wednesday will mark the 12th anniversary since the ACA was enacted. Houdek said the timing of Tuesday’s announcement was a coincidence, however. 

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Erik Gunn
Erik Gunn

Deputy Editor Erik Gunn reports and writes on work and the economy, health policy and related subjects, for the Wisconsin Examiner. He spent 24 years as a freelance writer for Milwaukee Magazine, Isthmus, The Progressive, BNA Inc., and other publications, winning awards for investigative reporting, feature writing, beat coverage, business writing, and commentary. An East Coast native, he previously covered labor for The Milwaukee Journal after reporting for newspapers in upstate New York and northern Illinois. He's a graduate of Beloit College (English Comp.) and the Columbia School of Journalism. Off hours he is the Examiner's resident Springsteen and Jackson Browne fanboy and model railroad nerd.

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