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California insurance regulators are trying to shut down what they say is an unauthorized effort to sell single-employer health coverage to individuals and families in California.
The coverage promised does not meet California standards for individual health insurance, it's not clear how many of the benefits offered exist, and marketers gave at least some of the purchasers the incorrect impression that they were buying coverage from Aetna or Anthem Blue Shield through Covered California, an Affordable Care Act public exchange program, according to an order that the California department issued June 30.
California Insurance Commissioner Ricardo Lara issued the order to tell Innovative Partners and related organizations and individuals to cease and desist from marketing the coverage. The document also notifies the parties named that they have the right to a hearing, and it orders them to "show cause why an order imposing a monetary penalty" should not be issued.
Innovative told the customers they were getting coverage provided by an employer health plan operated under the Employee Retirement Income Security Act, according to the California department.
"This was in aid of masking the sale and selling Innovative health insurance as a 'Small Employee Benefit Plan,' excluded from the state of California oversight," department officials said.
The department learned about the program when customers called the department to complain about problems with getting the promised benefits, and "none of the victims claimed to be employees of or partnered with Innovative," officials said.
Organizers provided plan cards indicating that the customers had access to Teladoc telemedicine services and discounted care through provider networks such as the MultiPlan Limited Benefit Plan network and the First Health Network for limited benefit plans. The First Health network is managed by CVS Health's Aetna subsidiary. The limited benefit plan networks serve patients with short-term health insurance, indemnity health insurance and other forms of coverage that are not subject to the Affordable Care Act requirements for individual major medical coverage.
One customer who called the California department, M.S., was told by an Innovative representative that he had coverage for mental health care.
"Innovative never paid for the mental health care, and M.S. was left with $1,709.24 in unpaid medical bills," officials said.
Another customer who called the department, K.K., tried to use Innovative to cover care for her son. "When she attempted to use the insurance, her claims were improperly denied," officials said. "Innovative also improperly charged her credit card multiple times. According to K.K., she also tried for days, unsuccessfully, to cancel the policy."
Innovative is a Coral Gables, Florida-based company that says it gives consumers a way to sell their fitness tracker data, according to its website.
Department officials indicated that the Innovative program provided at least some benefits.
Teladoc, First Health and Multiplan's PHCS network confirmed that they have or had contracts with Innovative, officials said.
The California department did not present evidence that Teladoc or the provider network managers knew how Innovative was using its relationship with them.
Representatives for Innovative, the plan network managers and most of the other parties named in the California order could not immediately be reached for comment.
A Teladoc representative emphasized that the company is a health care provider, not an insurance plan or broker; that it has not been served any documents and knows nothing about the order; and that it looks as if it appears to be on the order in error.
The allegations in the case appear to be similar to the allegations that Elevance Health, the parent of the Anthem Blue Cross and Blue Shield carriers, presented in a lawsuit against LifeX Research that was filed June 27.
Related: Elevance, Blue Cross Blue Shield sue LifeX Research over 'fake' Anthem health benefits
The allegations are also similar to those presented in a class-action suit filed in Florida in 2021.
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