TRENTON
– Attorney General Jeffrey S. Chiesa
and Acting Department of Banking and Insurance
(DOBI) Commissioner Kenneth E. Kobylowski
announced today that the Division of Law has
obtained an $859,250 judgment on behalf of
the State against National Benefits, Inc.,
in connection with the company’s unlawful
operation as a third-party health claims administrator.
Third-party
administrators are responsible for administering
health insurance claims that are filed by
their clients’ employees. Among other
things, third-party administrators receive
and process health insurance claims, determine
claim eligibility and disburse funds.
National
Benefits’ license to act as a third
party health claims administrator was revoked
by the State in August 2008. However, the
Parsippany-based company continued to operate,
and entered into more than 40 third-party-administrator
agreements with businesses and municipal
government entities during a two-year span.
During that time, National Benefits also
failed to answer repeated inquiries by DOBI
concerning its unlawful activities.
“This
is an important win for New Jersey citizens.
Because of the conduct of National Benefits
and its corporate officers, thousands of
people in New Jersey were left at the mercy
of unscrupulous individuals who were not
following the State’s insurance laws,”
said Attorney General Chiesa. “This
is an important enforcement case for consumers
and their employers, who may now have to
bear the financial burden of paying for
legitimate claims not processed by this
unlicensed third-party administrator.”
“The
Department of Banking and Insurance’s
regulatory efforts are designed to ensure
the integrity and financial solvency of
third-party administrators for the benefit
of policy holders, creditors and the public,”
said Acting Commissioner Kobylowski.
“When
insurance producers and other individuals
operate as unlicensed third-party administrators,”
Kobylowski added, “it circumvents
our regulatory oversight and places the
consumers – and all those who may
have claims – at risk.”
In
December 2010, DOBI sued to stop National
Benefits and three of its corporate officers
– Susan Harrison, John Major and Victoria
Kuenzler – from operating without
a license. Lawyers from the Division of
Law represented DOBI, and the matter was
decided in favor of the State by an Administrative
Law Judge.
A
subsequent Final Order against National
Benefits issued by DOBI, which incorporated
the findings of the Administrative Law Judge,
assessed a civil penalty of $855,000 against
National Benefits and its three individual
officers. An additional $3,000 penalty was
assessed against National Benefits and Kuenzler
for refusing to respond to DOBI’s
inquiries. The Final Order also assessed
costs of $1,250.
Attorney
General Chiesa and Acting Commissioner Kobylowski
urged employers to take the time to research
any company that represents itself to be
a third-party administrator before hiring
the company to process its employees’
health insurance claims.
Kobylowski
noted than an employer can determine whether
a company is a licensed third-party administrator
by contacting DOBI at 1-800-446-7467
or by checking its Web site at www.state.nj.us/dobi/division_insurance/managedcare/tpalist.html
The
State was represented in the National Benefits
matter by Deputy Attorney General Brian
Brennan of the Division of Law’s Banking
and Insurance Fraud Section. The matter
was investigated by Civil Investigator Judy
Suarez under the supervision of Assistant
Commissioner Gale Simon of DOBI’s
Division of Enforcement and Consumer Protection.
### |