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FOR IMMEDIATE RELEASE:

10/17/2024

FOR INFORMATION, CONTACT:
Craig Ey, 410-468-2488 (O)
443-604-9599 (C)

Maryland Insurance Administration takes action to prevent company from selling unauthorized health plans in Maryland

The Vitamin Patch to exit state permanently, pay fine

BALTIMORE – A Texas company selling unauthorized health plans in Maryland has agreed to exit the state and pay a $25,000 administrative penalty, Acting Maryland Insurance Commissioner Marie Grant announced.

Under terms of a Consent Order, The Vitamin Patch LLC of Dallas, Texas, has agreed to provide notice to its remaining Maryland-resident members that its health benefit plan will cease operations in Maryland no later than January 1, 2025. The Vitamin Patch currently has fewer than 1,000 members in the state, after many were already permitted to leave the plan and receive refunds after the Maryland Insurance Administration's intervention.

The Insurance Administration began an investigation into the company in March 2024 as a result of consumer complaints. The investigation found that The Vitamin Patch was selling health benefit plans in the state without a certificate of authority. Under Maryland law, an insurer may not engage in the insurance business in the state unless they have a certificate of authority issued by the Maryland Insurance Commissioner.

In recent years, the Insurance Administration has increasingly received consumer complaints related to unauthorized health plans operating under arrangements similar to The Vitamin Patch. The most common form of this arrangement involves entities marketing health plans they claim are exempt from state regulation because they are “self-funded" and authorized by the federal Employee Retirement Income Security Act (ERISA). The Administration's investigations have uncovered entities that claim that consumers can “buy" into the company and qualify for the exempt insurance, even though the consumers are not performing any work for the entity and are not employees or working owners. These types of arrangements are not compliant ERISA plans and therefore are subject to insurance regulation at the state level.

“Consumers are often unaware that these types of plans do not provide the minimum comprehensive health coverage mandated by the Affordable Care Act and that their policy forms have not been approved by the Insurance Administration," Acting Commissioner Grant said. “Consumer protection is our most important role, and we must make sure that companies active in the Maryland insurance market are following the law."

As part of the Consent Order, The Vitamin Patch has agreed to send a notice to all of its Maryland members, stating:

The Vitamin Patch will cease operation in Maryland at the end of the year.
Any member who wishes to cancel membership prior to December 31, 2024, may contact the company for a prorated refund.
Any claims for medical treatment obtained prior to a cancellation request or December 31 will be processed under terms of the contract.

Current or former members of The Vitamin Patch may qualify for health coverage through the Maryland Health Connection, the state's health insurance marketplace. Consumers can shop for insurance options through the Maryland Health Connection website at https://marylandhealthconnection.gov or by calling 1-855-642-8572. Open enrollment for Maryland Health Connection begins on November 1, 2024.

If you believe you have purchased an unauthorized health insurance plan, check your documents and/or insurance cards and reach out to the Maryland Insurance Administration's Health Coverage Assistance Team (H-CAT) at [email protected], 410-468-2442, or visit: https://qrco.de/hcat for assistance.

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About the Maryland Insurance Administration

The Maryland Insurance Administration (MIA) is an independent State agency charged with regulating Maryland's $49 billion insurance industry. For more information about the Insurance Administration, please visit www.insurance.maryland.gov or follow us on Facebook at www.facebook.com/MDInsuranceAdmin, X at @MD_Insurance, LinkedIn at www.linkedin.com/company/maryland-insurance-administration and Instagram at @marylandinsuranceadmin.