Three Residents Indicted for Insurance Fraud by Grand Jury

Late last month in New Castle County, a Grand Jury indicted multiple residents for insurance fraud. The indictments stem from Department of Insurance Fraud Prevention Bureau investigations, in partnership with the Delaware Department of Justice. They allege that following vehicle accidents, each indicted resident did knowingly present false information to auto insurers or otherwise caused false information to be presented.

“I want to commend our Fraud Prevention Bureau for their work identifying deceitful activity and helping to bring those who would defraud Delaware residents and companies to justice. Their efforts continue to send a strong message that fraud will not go unnoticed here, which can prevent future crimes,” said Insurance Commissioner Trinidad Navarro. “Through this work, we can help keep insurance premiums from rising by helping to make sure companies do not have to pay out fraudulent claims, and we can educate residents that engaging in fraud is very costly.”

A resident of Wilmington was indicted on September 27 following a two-vehicle auto accident and a fraudulent claim filed with Permanent General Insurance. The resident had no insurance at the time of the accident but obtained it afterward, and intentionally misrepresented the date of the accident to obtain a benefit that they were not entitled to. Video evidence was uncovered that confirmed the accurate date of the accident.

A resident of Newark was indicted on September 27 for knowingly misrepresenting the time of an auto accident. During the investigation, evidence was obtained that confirmed that the resident had no auto insurance coverage at the time of their accident and that their auto insurance policy was obtained after the accident had occurred. They engaged in insurance fraud through intentionally providing false information in order to obtain a benefit that they were not entitled to from Good to Go Insurance.

An additional resident was indicted for similar activity in an attempt to defraud Progressive Insurance. The resident obtained an auto insurance policy and filed a claim two days later, stating that their vehicle was struck by an unknown vehicle while parked at their residence. An examination of vehicle damage was inconsistent with this depiction, and the investigation further identified that the vehicle was involved in an accident three days prior to obtaining insurance coverage.

An indictment is merely an allegation and is not evidence of guilt. In all cases, defendants are presumed innocent until and unless proven guilty. Insurance Fraud is a felony.

Commissioner Navarro has a background in law enforcement and serves as Chair of the National Association of Insurance Commissioner’s Antifraud Task Force. The Delaware Department of Insurance Fraud Prevention Bureau is fully funded by annual assessment fees, not taxpayer dollars, and employs staff with extensive law enforcement and insurance investigative backgrounds and training, including credentials such as Certified Fraud Specialists and Accredited Healthcare Fraud Investigators.

The Bureau facilitates the detection of insurance fraud and works to reduce fraud occurrence through enforcement and deterrence. Additionally, the Bureau requires restitution for deceptively obtained insurance benefits, and by doing so reduces the amount of premium dollars used to pay fraudulent claims, in turn decreasing the likelihood of premium increases. The Bureau can be reached by toll free hotline (800) 632-5154, or (302) 672-7350, or by emailing fraud@delaware.gov. Reporting known or suspected fraud is free of charge and can be done confidentially.


$12.3 Million in Health Insurance Rebates for Individuals and Small Businesses

Highmark plan participants and groups to receive checks

Insurance Commissioner Trinidad Navarro announced today that Highmark Blue Cross Blue Shield Delaware will issue rebates totaling over $12.3 million to some Delawareans. Residents who purchase insurance on the Delaware Health Insurance Marketplace, those who purchase Highmark Delaware plans outside of the marketplace, and Highmark small group policyholders may receive rebates as a result of the Medical Loss Ratio (MLR) calculation.

MLR measures an insurer’s spending on medical expenses to confirm that at least 80 percent of premiums are being used for policyholders’ healthcare and prescription needs. It is an accountability measure included in the Affordable Care Act (ACA) that holds insurers to a strict standard and requires refunds if the threshold is not met. Insurers are not permitted to retain funds above this value for any reason, including to lower premiums for future years, as the policyholders effected may change. MLR is calculated on a three-year average – 2018, 2019, and 2020 were used in this assessment.

“Requiring insurers to meet the MLR ratio is one of the most critical tools the ACA gave us to protect consumers. These guardrails ensure residents and small businesses get the care they pay for, or get their money back – and they’re more important now than ever before,” explained Commissioner Navarro, who pointed to policyholders’ decreased and delayed use of healthcare throughout the pandemic as something likely to necessitate future rebates. “With decreased utilization of health services in 2020 and 2021 factoring into MLR for the next four years, and expected increases of utilization factoring into rates for 2022, this is yet another reminder that COVID will impact all aspects of healthcare, including insurance, for much of the foreseeable future.”

20,857 individual policyholders will receive rebates totaling over $8.4 million, with the average rebate being $405. This will be the second time in state history that rebates will be distributed to the participants of the individual market, with more than $12.6 million being sent to over 19,000 residents last year.

Highmark small groups, often small businesses, will receive nearly $3.9 million in cumulative return. 2,573 groups will receive an average rebate of $1,514, with 20 groups receiving rebates over $10,000. Employers can consider using these dollars to enhance benefits, reduce premiums for employees in future policy years, or provide refunds directly to group health plan participants.

Communications will be sent to policyholders in September and checks for both individual policyholders and small groups will be sent the week of September 15. Not every policyholder will receive a rebate. Those in the individual market with rebate questions can contact Highmark at 800-544-6679. Small group employers with rebate questions can contact their insurance producer, or Highmark at 800-241-5704.


Highmark Increases 2022 Affordable Care Act Marketplace Premiums

Expanded federal subsidies keep consumer costs low; SEP sees success

After two consecutive years of rate decreases, Highmark Blue Cross Blue Shield of Delaware, who offers the state’s Affordable Care Act (ACA) health plans, will increase base rates an average of 3% for the 2022 plan year. The announcement comes after extensive, in-depth independent actuarial reviews and a public comment period on the insurer’s initial proposal of a 4% increase. While insurers are increasing rates across the country, federal subsidies from the Biden-Harris Administration have cut consumer costs by 40% and will continue to be applied in the 2022 plan year. Residents are still expected to see savings despite the modest increase in the base rate.

The 2022 rate announcement comes after the end of the Biden-Harris Administration’s Special Enrollment Period (SEP), which gave residents the ability to enroll in 2021 ACA plans between February 15 and August 15. More than 5,377 Delawareans signed up for coverage during the SEP. Taking into account the 5% participation increase seen in last fall’s open enrollment, an estimated 30,000 Delawareans are now covered by 2021 plans. 23% of new and returning Delaware participants are enrolled in a plan costing $10 or less per month due to the American Rescue Plan.

“Stability in the individual health insurance market is so critical as we continue to battle COVID-19 and healthcare shortages. Rates remain more than 15% lower than they were just a few years ago, and with the American Rescue Plan, they’re more affordable than ever before,” said Insurance Commissioner Trinidad Navarro. “Coupled with the safety net of the SEP, the past year has been positive for insurance access.”

Delaware SEP enrollment February 15 through July 31 was more than double the same period last year, which saw higher-than-usual circumstantial enrollment due to COVID, and is nearly triple the typical enrollment for this time of year. Final numbers are expected in the coming weeks. The SEP’s success has led to proposals at the federal level for permanent open enrollment expansion as well as monthly enrollment opportunities.

Expansion of access and increased affordability remains a priority at the federal level, as American Rescue Plan funds increased tax credits and expanded subsidies farther into the middle class. Premium assistance will continue through 2022, and majority of Delaware marketplace enrollees will be eligible for these discounts that can reduce their monthly premiums.

Nationally, insurers are requesting premium increases as policy use is expected to rise with more residents scheduling postponed elective procedures and visits. The rise of prescription costs continues to be a factor in premium planning.

All ACA plans offer essential health benefits, including coverage of pre-existing conditions, prescriptions, emergency services and hospitalization, mental and behavioral health coverage, outpatient care and telehealth, lab services, and more. ACA rates do not vary based on vaccination or COVID-19 status.

Highmark Blue Cross Blue Shield Delaware is the sole health insurer offering plans on Delaware’s Health Insurance Marketplace for 2022, offering 12 plans for individuals and families. Two dental insurers – Delta Dental of Delaware, Inc. and Dominion Dental Services, Inc. – offer stand-alone dental plans on the marketplace.

Open enrollment for the Marketplace takes place between November 1 and December 15 each year. However, residents may qualify to enroll or change plans based on special circumstances, such as a loss of qualifying health coverage, change of income, becoming a parent, and several other qualifying factors. Find out if you qualify for special enrollment.

The rate change does not apply to Medicare, Medicaid, or those with group or individual policies outside of the Marketplace.

More information on the rate review process


Commissioner Trinidad Navarro Announces National Improper Marketing of Health Plans Working Group

National Antifraud Task Force takes on new charges to protect consumers

Delaware Insurance Commissioner Trinidad Navarro, Chair of the National Association of Insurance Commissioners’ (NAIC) Antifraud Task Force, announced today the successful creation of the Improper Marketing of Health Plans Working Group, which aims to tackle some of the nation’s most serious consumer-centered health scam efforts and end the siloed approach to addressing the issue.

“Robocalls, search engine advertisements, mailers, and endless telemarketing efforts aim to steal from those seeking comprehensive health insurance. All across the country we have seen scam artists build out networks of communication that center around selling insurance plans that do not offer residents adequate protection. They are merciless in their efforts, and they trick consumers into thinking they will have the coverage they need for their medical care” said Insurance Commissioner Trinidad Navarro. “There’s no need to sugarcoat it – there is deception occurring, and its being directed towards some of the most vulnerable residents. COVID-19 rightfully increased consumer concerns and led more people to seek out affordable insurance – but this concern has been manipulated by scammers. This Working Group will make headway towards ending these efforts to exploit residents.”

The Working Group is a new approach to address concerning increases in consumers being marketed away from ACA-compliant plans to other products that do not offer comprehensive coverage for things like preexisting conditions or hospital visits. Many improperly marketed health plans claim to be compliant, or advertise under look-a-like naming that deliberately creates confusion, such as “Bidencare,” or “Healthcare.com.”

These products may be inadvertently found by consumers searching for legitimate coverage, or on websites where a fraudulent entity has purchased advertising. Often, a consumers’ inquiry can be turned into a request for a quote without consent, and contact information is sold to third parties. The plans use of lead generators and telemarketing is so pervasive that department investigators must purchase dedicated phones for their investigations due to the intrusive, rapid-fire robocalls and text messages that can mount to more than 40 per day from a single webform completion.

The Working Group has meet informally since March 2020 to create a comprehensive conversation on the issue, combining discussions that previously took place in separate health, market conduct, and fraud committees. State and federal level regulators have attended, discussing the latest bad actors and efforts in their jurisdictions, often finding that those efforts are echoed elsewhere. Movement of scams from state to state after regulators shut them down is one of the key reasons that regulators sought approval of the subcommittee and its charges by NAIC’s Executive and Plenary Committees.

“The formation of this Working Group can help stop scams before they start,” shared Delaware Special Deputy Frank Pyle, who has served decades in law enforcement, fraud investigation, and market conduct, and lends his expertise to the new subgroup as Co-Chair. “With greater communication between regulators, those who aim to exploit consumers should be scared. Running from state to state will not be an option.”

The Working Group’s official charges include:

  • Coordinate with regulators, both on a state and federal level, to provide assistance to and guidance on monitoring the improper marketing of health plans, and coordinate appropriate enforcement actions, as needed, with other NAIC Committees, task forces, and working groups.
  • Review existing NAIC Models and Guidelines, including laws and regulations, that address the use of lead generators for sales of health insurance products and identify models and guidelines that need to be updated or developed to address current marketplace activities.

“The Nebraska Department of Insurance is pleased with the official recognition of this group by the NAIC. When we started this group, our goal was to create open communication between all states and the federal government in order to identify and investigate these bad actors in the improper marketing of health plans. Today, that goal is achieved, but the work is just beginning. We will utilize this group to further investigations and prosecutions of those entities and strengthen our laws so we can protect the insurance buying public from these activities,” shared Martin Swanson, Deputy Director of the Nebraska Department of Insurance and Chair of the Working Group.

Following approval of the Working Group, regulators can now formally join the committee. Ad hoc virtual meetings have consisted of contributors from nearly every state, with meetings regularly engaging 100 to 300 participants. The Working Group’s members have already taken multiple administrative actions against entities and schemes identified by the group to protect consumers. Meetings are regulator-only.

The Working Group is part of the National Antifraud Task Force, which works with insurance regulators across the country, as well as local, state, federal and international law enforcement and antifraud organizations. The Task Force provides guidance and resources for insurance departments across the country and in the U.S. Territories, including tracking and analyzing trends in fraud. Numerous subgroups inform the Task Force’s work, including the Antifraud Education Enhancement Working Group and the Antifraud Technology Working Group.

More information about non-compliant health plans


Delaware Seeks Data on Climate Change’s Impact on Insurance

Participating in National Insurer Climate Risk Disclosure Survey

Insurance Commissioner Trinidad Navarro has announced Delaware’s participation in the National Association of Insurance Commissioners’ Insurer Climate Risk Disclosure Survey, an effort to assess how the impacts of climate change will reverberate across the insurance industry. From investment practices, to increased claim occurrences impacting companies’ financial sturdiness, to insurance product accessibility for consumers, the changing environment means that insurance must be a changing industry.

Insurance departments throughout the United States are working to evaluate both risks to the industry, and its resiliency in responding to those challenges to ensure continued market stability through several mechanisms, including National Association of Insurance Commissioners’ (NAIC) Climate and Resiliency Task Force and the eight-section survey.

“In Delaware and across the country, residents are feeling the impacts of climate change, and relying on insurers to respond to the heightened risk of damage to our properties, businesses, homes, and lives. As natural disasters occur more frequently and with more intensity, the industry must be prepared to provide rapid response,” said Insurance Commissioner Trinidad Navarro. “The issues of affordability and access seen as a result of wildfires in the west and hurricanes in the south have served as ominous forewarnings of what may be to come in our own region, and through participating in the Climate Risk Disclosure Survey we can better understand how prepared Delaware insurers are for these events and what opportunities we have to protect residents from these effects.”

Eighty-two Delaware insurers that reported $100 million or more in 2020 premiums have been asked to respond to questions about their investment and risk management policies, processes to identify, assess, and reduce climate-related risks, actions taken to encourage policyholder mitigation efforts and engage key constituencies in climate-based discussions, as well as information about the company’s existing analysis of risk and their organization’s climate-related goals, such as reducing emissions.

Surveys are due August 31, 2021. In total, over 1,200 insurers will complete the Survey, representing more than 70% of the U.S. insurance market. The California Department of Insurance, who asked Delaware to participate in this year’s Survey, will compile the data of all participating states and issue a public report.

Responding insurers with survey-related questions can contact Special Deputy Frank Pyle.

View the Insurer Climate Risk Disclosure Survey

View Survey Results for Prior Years