The Texas Attorney General recently accused a faith-based health care provider of fraud. The state alleges the organization collected thousands of dollars in policy payments for coverage it deemed “worthless.” The allegations led the Attorney General to file a restraining order against the company to keep it from signing up new members from the state of Texas.
The organization that is the subject of these allegations has faced scrutiny in other states, including Georgia. The group is also the subject of an investigation by the Federal Bureau of Investigation (FBI). The organization has stated it will cooperate fully with all officials, including the FBI.
Details of the allegations — group provides aid through program based on religious tenants
The group does not sell traditional insurance. Instead, it provides policyholders with financial assistance in a manner meant to mimic the tenants in the Bible. This includes helping those who need to pay medical bills.
As the group does not provide policyholders with traditional insurance, it may not need to abide by traditional laws and regulations. Such policies can be legal as long as the organization is careful not to mislead policyholders. The FBI investigation will likely include a review of communications with policyholders to determine if misleading comments were made to encourage participation.
Lesson for similar organizations — ensure the company does not violate the law
This case provides an important lesson for policy providers throughout Texas. It is important to ensure the group follows applicable state and federal rules and regulations when selling policies. A failure to do so could result in a federal investigation and potential criminal charges.