Consumers who purchased health insurance from MEGA Life and Health Insurance Company (MEGA) may be finding that the coverage they purchased doesn’t live up to the promises they received from the salesperson who sold them the policy.

MEGA is accused of using sales tactics to acquire customers. The “associations” being used tell consumers that by joining a group that has access to the best rates from many insurers. However, what consumers don’t know is that the “association” only sells MEGA products and may not provide the coverage promised. This has led to lawsuits against the company, its sister companies, NASE, Midwest National Life Insurance Company of Tennessee or Alliance for Affordable Services or from its parent company, Health Markets.

Straight Talk

We interviewed a number of consumer attorneys and asked them to provide some guidance on potential claims against these insurers:

How do I know if I have a bad faith insurance claim against Mega Life?

Well, it involves a lot of research and you would have to contact an attorney with a experience in insurance matters to review the claims, the policies and the advertising information, as well as the dates of application, to determine if you really have a case.

Would I base my case on the date of my application or the date when my claims were denied?

It depends on the cause of action. Some of the fraud causes of action would start at the time of purchase or at the time of application. However, a bad faith cause of action in a complaint would run from the date of the denial.

What is the California Department of Insurance doing about these types of claims?

Well, we don’t really think they’re doing too much. We know that they opened an investigation, but we haven’t seen too many changes in the way that these companies are doing business here in California, [although] there have been some changes in the departments since the elections. We have a new Insurance Commissioner, so I’m hoping that the Department of Insurance will continue their investigations and make these companies work properly and properly protect California insurance consumers.

What remedies do consumers have?

It depends on whether claims have been made, number one, and it depends on whether you have been defrauded, number two. It also depends if you have been a member of the class that has settled, and that would not include individuals who purchased between August 1, 1998, and May 14, 2004. If you were a member of the class, it would limit, or maybe eliminate, any causes of action you would have in this regard. Our recommendation would be to have an attorney make that determination.

If you have purchased a policy from MEGA Life and Health Insurance Company and have had a claim denied, contact an attorney who specializes in insurance claims to protect your rights.