Is Your Health Insurance Provider Overbilling You?

State regulators in Wisconsin say Milwaukee-based Assurant Health overbilled an unspecified number of small businesses and will have to pay refunds to those clients.

It’s not yet clear how many of Assurant Health’s small employer clients, those having fewer than 50 employees, had to pay higher health insurance premiums because of the miscalculations or how far back the miscalculations stretch.

During an investigation by the Wisconsin Office of the Commissioner of Insurance found that Assurant Health, which was known as Fortis Health Insurance Co. until 2004, regulators pointed out potential overbillings in a sampling of 2002 and 2003 policies. The investigation was the result of an unusually high number of complaints filed against the insurer in 2002 and 2003.

Investigators found that Fortis erroneously used occupation as a factor in determining small group insurance rates. Wisconsin state law bars insurers from considering occupation in determining those rates, although factors including age, sex and health of the group can be considered. Excluding certain factors in setting rates helps insure more common rates and smaller rate swings for small businesses, state regulators said.

The amount that was overbilled will be better known by early June, when Assurant must report a more detailed account of the error to Wisconsin regulators, Susan Ezalarab, director of the insurance commissioner’s Bureau of Market Regulations, told the Business Journal of Milwaukee. Ezalarab declined to estimate how many customers were affected, or how large Assurant’s reimbursement to those clients might be.

Assurant has traditionally been known to higher premiums for its small group insurance products, Jon Cyganiak, an agent with Brookfeild-based Cyganiak Planning Inc. told the Business Journal of Milwaukee. Large-scale small employer miscalculations are rare, he said.

Assurant Health is one of four operating divisions of Assurant, Inc., which comprises the U.S. insurance operations that European financial conglomerate Fortis Inc. spun off as a publicly traded company in an initial public offering in February 2004.

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