I recently filed suit against Mega Life (again) to help my client recover health insurance benefits.

This company has been sued many, many times for failing to pay health benefits. In fact, Mega Life’s parent company, HealthMarkets, Inc., recently received a $20,000,000 fine from 29 states as a result of a 3 year multi-state investigation which found numerous problem involving consumer disclosure, agent training and, claim and complaint handling practices.   The state of Florida will receive more than $1.8 Million from this settlement.

Mega Life is an Oklahoma insurer that claims it is entitled to certain protections set up by our Florida Statutes for "out-of-state group plans." In order to avail itself of the protections set up in the Florida Statutes for these out-of-state groups, Mega Life issues a "master policy" to a company that Mega Life actually set up. Consumers are then encouraged to by Mega Life agents to become "members" of the company that Mega Life sets up. Mega Life then promises that by being members of this company, consumers will be entitled to lower rates and quality health insurance benefits.

Unfortunately, our Florida statutes do provide certain protections to these out of state insurers that are not available to other health insurers. However, to be eligible for these protections, Mega Life must strictly comply with the criteria set forth in the statute.  I don’t believe Mega Life complies.  One of things that Mega Life must prove is that their insurance benefits are "reasonable in relation to the premiums charged thereunder and the issuance of the group policy has resulted, or will result, in economies of administration." Florida Statute 627.6515(2). In this case, I have retained an insurance actuary to investigate whether Mega Life’s health benefits comply with this requirement.

In our current case, Mega Life is denying the claim for health insurance benefits because, according to Mega Life, our client’s condition is a "pre-existing condition." The problem for Mega Life is that even if the condition is "pre-existing," the law in Florida, the District of Columbia (which is the law that Mega Life says applies), and the federal law, all mandate coverage for pre-existing conditions. Thus, even if Mega Life proves our client’s condition is pre-existing, Mega Life will still be on the hook for the medical expenses.