Michaels is accused of stealing the commissions from MVP Health Care of Schenectady as the result of the improper enrollment of individuals into small group and sole proprietor health plans insured by MVP and offered through the Otsego County Chamber, according to a release from the agency.
The insurance policies were sold to downstate residents who were purportedly enticed to buy them on the basis that the coverage was less expensive than health insurance in the New York City area.
However, in most cases, individuals must reside or work in the geographical area where a health insurance plan is offered to be eligible.
The insurance policies of all of the 400 people were canceled after it was discovered they were ineligible to join the plan.
Financial Services Superintendent Benjamin Lawsky said in the release: “If this scheme had been left uncovered, it could have led to higher premiums for people living in Otsego County. Their premiums could have begun to reflect the health care costs of people obtaining more costly services in New York City.”
The scheme was discovered after MVP noticed an unusually high spike in new enrollments and saw that a large number of enrollees were from downstate. MVP paid nearly $1 million in health care costs associated with the improperly enrolled individuals.