October 20, 2003
Sean Caine, 410-576-6357
GENERAL'S OFFICE SETTLES WITH COMPANY THAT PROMISED DISCOUNTED HEALTH
General J. Joseph Curran, Jr. announced that his Consumer Protection
Division has reached a settlement with ABBC, Inc., a New Jersey
Company that sold memberships it claimed entitled consumers to discounted
health benefits. The company, using the name American Benefits Association
("ABA"), and its owner, James Shevlin, agreed to refund
more than $46,000 in dues payments it received from Maryland consumers.
ABA sold memberships, which it called its Millennium Plan or All
American Alliance, claiming that members would receive discounts
for prescriptions, doctor visits, hospital visits and other related
health services. The Millennium Plan cost $39.95 a month and the
All American Alliance cost $79.95 a month. The company sold its
memberships through a Baltimore insurance salesman named Carl Kaufman,
who did not join the settlement.
The Division alleged the company exaggerated the benefits it claimed
consumers would receive if they purchased memberships. Under state
law, hospitals cannot offer discounted rates to groups of consumers.
All hospital rates are uniformly set by the Department of Health
and Mental Hygiene's Health Services Cost Review Commission. Additionally,
the Division alleged that the reductions the company claimed it
could provide consumers for doctor visits and other services were
exaggerated. The Division also alleged that the membership plans
sold by ABA were insurance products that required the approval of
the Maryland Insurance Commissioner before they could be sold in
Maryland. ABA did not seek such approval prior to its membership
sales to Maryland consumers.
The settlement requires ABA and its owner to stop selling memberships
in their Millennium Plan and All American Alliance unless the plans
are approved by the Maryland Insurance Commissioner. In addition
to the payment of restitution, ABA and its owner must pay the Division
$2,500 for the costs of its investigation and they are also required
to pay a $25,000 penalty if they violate any of the terms of the
"Consumers must be given accurate information about any health
benefit plans they purchase," Curran said. Curran advises consumers
to consult with the Maryland Insurance Commissioner's Office before
purchasing any health benefit plan or other health insurance.
Consumers who believe they are entitled to restitution under the
Attorney General's settlement with American Benefits Association
may contact the Consumer Protection Division by calling (410) 528-1840.