AIM health plans, from the Association of Independent Managers, are one insurance policy to avoid.
What’s wrong with AIM health plans?
AIM health plans don’t payout for medical care. One Utah resident – Jill Goodmansen – paid $375 a month for an AIM health plan which offered a big payout for doctor visits and treatment. She wasn’t able to collect the money from AIM after her first hospital visit for the baby she was expecting. The Chief Finance Officer of Florida Department of Financial Services, Alex Sink, said that AIM health plans take peoples’ money without covering them for the costs of medical care.
Some of the brochures for AIM health plans used the word insurance but did not identify the insurance company who provided it. The plans are not really insurance at all but, instead, discount plans. Being a discount plan is not a problem, it is only mis-selling the plan as insurance that is illegal. In fact discount plans may be beneficial to some people, especially if they are unable to obtain regular insurance. Advertising discount plans as insurance is a common health insurance scam you should watch out for when buying insurance.
AIM is an unlicensed company claiming to be licensed. Neither AIM nor any of its associated companies are authorized to do health insurance businesses in Florida. Neither AIM nor its administrator, IRG, has records with the Better Business Bureau. Unpaid claims from unauthorized insurance companies are not covered by the Guaranty Fund (which normally pays the claims of insurance companies that have gone bankrupt). Instead the agents themselves are liable to pay the unpaid claims and may be open to prosecution. Agents who sell unlicensed insurance can lose their own license.
The Utah Attorney General's Office and State Insurance Department said AIM hasn’t been backed by an underwriter since July 2009. Underwriters assess the risk of new people wanting to buy insurance. AIM claimed they were backed by Town and Country Insurance but the President of that company, Scott Ulbrich, said he had never had any contact with AIM and in fact his company only sells dental insurance not health insurance. Other people were told that AIM was backed by other companies, some of which, according to the Utah State Insurance Department, were unlicensed.
AIM also falsely claimed to be HIPAA (Health Insurance Portability and Accountability Act) approved.
How many people were affected by AIM health plans?
The Florida Office of Insurance Regulation claim more than 1,800 customers purchased fake AIM health plans. KSL news said people in 47 states bought the plans. 500 policies were sold to Illinois residents and 400 in Utah.
The Florida Department of Financial Services received complaints from 96 customers who had purchased insurance from 49 agents. There are many more complaints about the company on the internet.
What happened to AIM?
AIM was fined $25,000 by the Illinois Department of Insurance, but failed to turn up in court when summoned. It is unclear whether they ever paid their fine.
The Florida, Louisiana and Illinois Offices of Insurance Regulation issued Cease and Desist Orders to AIM in 2010.
The Florida Department of Financial Services tried to track down the agents responsible for the sales. So far there has been no indication of how successful they were.
In 2011 the plans resurfaced, still being marketed as approved and still not (at least not in Ohio and Georgia where the owners of Insureblog checked out the claims being made).
What to do if you have purchased unlicensed insurance?
Whether you purchased an AIM health plan or any other type of unlicensed insurance, the best thing to do is:
- Call your state’s Chief Financial Officer’s helpline.
- Contact your bank or credit card provider and get them to stop payments and be alert for any unauthorized transactions.
- Get licensed insurance to replace your current plan.
How to avoid purchasing unlicensed insurance?
- Make sure you know exactly what you are buying. Is it medical insurance or just a discount plan?
- Watch out for deals that seem too good to be true.
- Don’t respond to unsolicited calls, emails or faxes.
- Check the insurer is authorized with the Office of Insurance Regulation before making any purchase.
Watch out for AIM health plans which may resurface at any time.