A class action was filed in Palm Beach County Circuit Court against Arvida
Realty Services (``Arvida'') and others on behalf of Arvida real estate agents
who enrolled in a now-defunct health insurance plan Arvida offered all of its
Florida realtors.
The class action complaint, filed by Annette Farenga, her husband Michael
Farenga, and Ellis Jackson, former Arvida realtors, alleges that Arvida offered
discount health insurance coverage to all of its Florida realtors through
Employers Mutual, L.L.C., a Carson City, Nevada insurer. The plan was
attractive to Arvida's realtors because it offered lower-than-market premiums
with a wide range of physicians to choose from. In August 2001, however,
Florida's Department of Insurance issued an Immediate Final Order under which
it found that Employers Mutual, L.L.C. was not licensed or authorized to sell
health insurance in the State of Florida. Despite the Commissioner's public
findings, however, Arvida continued to advise its realtors to send their
insurance premiums to Employers Mutual L.L.C. To date, insurance commissioners
in seven states have issued cease and desist orders against Employers Mutual.
The plaintiffs learned today that their health insurance coverage has been
terminated by Thomas Dillon, the court appointed Independent Fiduciary
overseeing Employers Mutual. According to Annette Farenga: ``Now we have no
coverage. Many of us dropped our previous health insurance plan because we
thought the Arvida sponsored plan through Employers Mutual was triple-A rated
and half the price. I'm outraged at what has happened.'' According to Kenneth
Vianale, attorney for the plaintiffs, Employers Mutual contracted with First
Coast Premier, an insurance brokerage, to find companies like Arvida that had
thousands of employees who might be eager to switch to a new low-cost medical
plan. According to Mr. Vianale, ``Arvida did little or no due diligence on
Employers Mutual before it offered the plan to its realtors. Even a minimal
background check by Arvida would have disclosed that Employers Mutual was not
licensed to offer a multiple employer welfare arrangement in Florida like the
one Employers Mutual offered.''
Published: January 30, 2002
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