newjerseynewsroom.com

The state government has obtained an $859,250 judgment against Parsippany-based National Benefits Inc. in connection with the company’s unlawful operation as a third-party health claims administrator, Attorney General Jeffrey S. Chiesa announced Monday.

Third-party administrators are responsible for administering health insurance claims that are filed by their clients’ employees. Among other things, third-party administrators receive and process health insurance claims, determine claim eligibility and disburse funds.

National Benefits’ license to act as a third-party health claims administrator was revoked by the state in 2008. However, the company continued to operate, entering into more than 40 third-party-administrator agreements with businesses and municipal government entities during a two-year span. During that time, National Benefits also failed to answer repeated inquiries by DOBI concerning its unlawful activities.

“This is an important win for New Jersey citizens,” Chiesa said. “Because of the conduct of National Benefits and its corporate officers, thousands of people in New Jersey were left at the mercy of unscrupulous individuals who were not following the state’s insurance laws. This is an important enforcement case for consumers and their employers, who may now have to bear the financial burden of paying for legitimate claims not processed by this unlicensed third-party administrator.”

“The (state) Department of Banking and Insurance’s regulatory efforts are designed to ensure the integrity and financial solvency of third-party administrators for the benefit of policy holders, creditors and the public,” Commissioner Kenneth E. Kobylowski. “When insurance producers and other individuals operate as unlicensed third-party administrators, it circumvents our regulatory oversight and places the consumers — and all those who may have claims — at risk.”

In December 2010, DOBI sued to stop National Benefits and three of its corporate officers — Susan Harrison, John Major and Victoria Kuenzler — from operating without a license. The matter was decided in favor of the state by a state Administrative Law Judge.

A subsequent order against National Benefits issued by DOBI, which incorporated the findings of the judge, assessed a civil penalty of $855,000 against National Benefits and the three officers. An additional $3,000 penalty was assessed against National Benefits and Kuenzler for refusing to respond to DOBI’s inquiries. The order also assessed costs of $1,250.

Chiesa and Kobylowski urged employers to take the time to research any company that represents itself to be a third-party administrator before hiring the company to process its employees’ health insurance claims.

Kobylowski said an employer can determine whether a company is a licensed third-party administrator by contacting DOBI at 1-800-446-7467 or by checking its Website.

The state was represented in the matter by Deputy Attorney General Brian Brennan. The matter was investigated by Civil Investigator Judy Suarez.

—TOM HESTER SR., NEWJERSEYNEWSROOM.COM