Iowa insurance company to repay $1.3 million to local governments

A Burlington-based insurance company has agreed to pay back $1.3 million to 33 local government entities in Iowa to settle claims it added on charges for health insurance.

The Iowa Insurance Division had claimed that from January 2005 to May 2014, Two Rivers Insurance Co. tacked on additional costs to members of the Iowa Governmental Health Care Plan by adding its fees on top of premiums charged by Wellmark Blue Cross and Blue Shield.

Two Rivers, the division said, did not separately distinguish its costs from what Wellmark charged.

Combining those costs, the division said in legal documents released Monday, 'had the capacity to mislead members into believing the presented amounts were entirely premium established by Wellmark and concealed the amounts of Two Rivers' compensation.”

'Any compensation apart from premium, any partial self-funding charges or any other producer or administrator fees or charges must be clearly disclosed so that these amounts and their purpose can be understood by insurance purchasers,” Iowa Insurance Commissioner Doug Ommen said in a statement. 'Our industry has been trending toward disclosure of all agent compensation to avoid even the appearance of a conflict of interest with the customer. We are pleased that Two Rivers made the decision to make changes when the issue arose and has now agreed to settle the investigation.”

Two Rivers did not admit wrongdoing in the settlement. The insurance company has offices in Coralville, Iowa City and Des Moines, among other cities.

Payments to local governments ranges from $1,876 to Chickasaw County up to $253,428.10 to the city of Council Bluffs, according to the settlement. The payments also includes $35,670 to Clayton County, $52,322 to Grundy County and $11,894 to Dubuque County.

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