An Iowa health insurance agency will pay $1.3 million to local governments to settle allegations that it overcharged for premiums.
Two Rivers Insurance Co., which is based in Burlington, denied the allegations that it inflated the amount spent on premiums for plans purchased through Wellmark Blue Cross and Blue Shield, but the Iowa Insurance Division determined that the group “engaged in unfair and deceptive acts and practices,” according to court documents (PDF).
“Such representations had the capacity to mislead members into believing the presented amounts were entirely premium established by Wellmark and concealed the amounts of Two Rivers’ compensation,” the division concluded.
Two Rivers President Todd Ackerman denied any wrongdoing in a statement issued to The Des Moines Register.
"Rather than prolong what would be an extremely costly and burdensome legal process, Two Rivers is pleased to conclude the review through this agreement," Ackerman said. "While we still believe our past practices were appropriate at the time, we appreciate the efforts of Iowa Insurance Commissioner Doug Ommen to bring this matter to a resolution."
Wellmark severed ties with Two Rivers in 2014 when an audit flagged the overcharges. The payments will be sent to 33 different local government bodies, including cities, counties and school districts, that bought Wellmark plans through Two Rivers. The payments range in value, and these entities could choose to accept the settlement or pursue legal action for further compensation.
In a statement, Iowa Insurance Commissioner Doug Ommen said he was “pleased” that Two Rivers chose to settle and make changes in response to the issue.
“Our industry has been trending toward disclosure of all agent compensation to avoid even the appearance of a conflict of interest with the customer,” he said.