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Poolman Halts Texas Business Operation in ND - Issues Cease and Desist
September 21, 2005 701-328-2440

Bismarck, ND - North Dakota Insurance Commissioner Jim Poolman today issued a Cease and Desist Order against a company that markets "discount health plans". Choice Benefits is a Houston, Texas based company that has advertised in North Dakota in violation of a new state law aimed at curbing abuses in the marketing of discount medical plans. Poolman warned consumers to be aware of Choice Benefits and similar companies that may be trying to market these types of plans throughout the state.

Poolman's order alleges that Choice Benefits' advertisement failed to disclose that the discount medical plan was not an insurance policy; it used misleading terminology that could cause a consumer to believe the plan was insurance; it failed to disclose that plan members are obligated to pay for all health care services, but will receive a discount from those health care providers that have contracted with the discount medical plan organization; and finally, the advertisement failed to include the name and address of the marketer and of the discount medical plan organization. 

This is the first Cease and Desist Order issued to enforce this statute which was passed in the last legislative session. Poolman said, "These plans are not health insurance. They aren't even close, and these companies should not be tricking North Dakotans into believing that they are." 

"Typically, discount medical plans claim that by seeking services from participating providers the bills for dental work, prescription drugs, or even medical and hospital care will be significantly discounted," Poolman explained. "The problem is that often these plans have few, if any, participating providers in North Dakota." Poolman warned that before purchasing a discount medical plan, consumers should check the plan's list of providers to make sure they are located in their community or surrounding area. 

Acting in response to numerous consumer calls, Poolman has compiled a list of tips to help consumers decide whether or not to purchase a medical discount plan. Please visit the section called Consumer Tips at the Insurance Department website's homepage, www.state.nd.us/ndins. Consumers may also call the Insurance Department's Consumer Hotline at 1.800.247.0560 for the same helpful information. 

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North Dakota Insurance Department
600 E. Boulevard Ave.
Bismarck, ND 58505-0320
Phone 701.328.2440
Toll free 800.247.0560
Fax 701.328.4880

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