ATTORNEY GENERAL'S OFFICE SETTLES WITH COMPANY THAT PROMISED DISCOUNTED HEALTH BENEFITS

Attorney 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 settlement.
"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.

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