The California Department of Insurance (CDI) has taken action against a Florida-based company, Innovative Partners LP, for allegedly selling health insurance plans without proper authorization. The CDI issued a cease-and-desist order, claiming the company marketed and sold what it called “phony” single-employer health plans while operating without a license in California.
Innovative Partners reportedly grew rapidly, going from having no enrollees at the start of 2023 to over 14,000 policyholders by the end of the year. However, regulators believe the number of affected consumers could be even higher as investigations continue.
In addition to Innovative Partners, the state has issued cease-and-desist orders to ten other entities that allegedly helped facilitate this scheme. These include third-party administrators and healthcare vendors accused of supporting the illegal operations.
Complaints about Innovative Partners started to emerge in 2024. Many consumers believed they were purchasing comprehensive health coverage, only to find out they were sold limited-benefit plans or, in some cases, no coverage at all. This confusion often came to light when consumers sought medical care and received unexpected bills for services they thought were covered.
Some policyholders were misled into thinking they were buying plans through Covered California, the state’s health insurance exchange, or from well-known insurers like Aetna and Blue Shield of California. Reports indicate that sales representatives falsely claimed affiliations with these reputable entities.
The CDI noted that Innovative Partners tried to present its policies as part of a small business employee benefit plan. However, none of the consumers reported any employment relationship with the company, raising further questions about their practices.
The CDI’s order aims to stop any further sales or administration of these plans in California and warns of potential penalties for continuing operations. Insurance Commissioner Ricardo Lara emphasized the importance of consumer trust in health coverage, stating that selling insurance without proper licensing is illegal and jeopardizes consumers’ health and finances.
As of now, the CDI has not announced whether it will take further enforcement actions or involve law enforcement. Innovative Partners has not publicly responded to the allegations.