The New Mexico Office of Superintendent of Insurance (OSI) has issued a reminder to insurers and producers that marketing limited-benefit health plans as comparable to major medical plans is deceptive if such plans are not compliant with the Affordable Care Act (ACA).
The OSI said misleading consumers by suggesting non-ACA-compliant plans offer equivalent coverage violates state law and regulatory standards. To support compliance efforts, the office released several examples of deceptive marketing practices identified in prior investigations.
According to the OSI, these practices include bundling or offering to bundle multiple limited-benefit coverages in a single transaction and using terminology associated with ACA-compliant plans such as “essential health benefits” or “dollar-first plan.” Selling group or association memberships in conjunction with limited-benefit products was also cited as deceptive when the distinction between comprehensive and limited coverage was not clearly communicated to buyers.
The regulator further warned that spoofing a prospective buyer’s caller ID to impersonate another caller – particularly one appearing to be from another carrier, health care provider, or government agency – is considered a serious offense. Misrepresentation of identity through false names, fabricated National Producer Numbers, or unapproved advertisements also constitutes deceptive conduct.
The regulator said, “It is the duty of insurers to make sure advertising and marketing are not deceptive.” The OSI emphasized that insurers are responsible not only for their own advertising but also for the actions of producers who market their products. This includes liability for indirect marketing or use of unapproved forms, which the office considers inherently misleading.
Violations may result in fines, penalties, and potential revocation of producer licenses or insurer certificates of authority. The superintendent’s office reaffirmed that accountability extends to all parties involved in the promotion and sale of limited-benefit plans.
The announcement follows closely after another regulatory development concerning motor vehicle insurance. BestWire reported that the OSI released a bulletin in October updating the state’s uninsured and underinsured motorist coverage requirements.
The update stems from a New Mexico Supreme Court ruling mandating that insurers must now provide disclosures and notifications clarifying that uninsured and underinsured motorist coverage applies on a per-vehicle basis.
How can insurers avoid misleading marketing? Share your insights in the comments below.
