Meritus Placed under Supervision by Department of Insurance – State seeks to wind down Meritus operations based on discretionary power

For Immediate Release

MEDIA CONTACT:
Gabriel Rushing
Director of Communications and Marketing
623.385.0650 (o)
grushing@meritusaz.com

Tempe, AZ (October 31, 2015) – Meritus, Arizona’s only non-profit health insurance Cooperative (CO-OP) has been placed under supervision by the Arizona State Department of Insurance (AZ DOI) with the intention of winding down operations at the end of 2015.

Tom Zumtobel, CEO of Meritus stated “Current Meritus members should not worry about having their claims paid or interrupted access to medical providers.” Meritus has over $30 Million on hand to pay claims and meet the statutory requirements outlined by the Arizona Department of Insurance. In addition, at the request of the AZ DOI, Meritus has transferred over $4 Million to the department to assure there is no risk to our policy holders.

Late in the day Wednesday, the Meritus leadership team and Board of Directors was informed of the decision by the AZ DOI to place Meritus into receivership. Zumtobel noted, “We were caught off guard by this extreme request based on our current and projected financial position. We have been working closely with the AZ DOI over the past few months to comply with all regulatory requirements and maintain sound financial accountability to the State. To date, we are in compliance with all AZ DOI regulatory and financial statutory guidelines.”

Meritus has been in ongoing discussions with the AZ DOI since that time, and on Friday was given less than an hour to respond to the revised regulatory ruling. “This really caught us by surprise,” Zumtobel said. “We couldn’t get feedback from DOI on what specifically we needed to do.”

During the second year of operations Meritus experienced extraordinary growth helping thousands of Arizonans gain access to health coverage. The Meritus Board and leadership team is currently reviewing all options available to continue to offer Arizonans affordable health insurance.

If the regulatory action taken by the AZ DOI is successful, Meritus must wind down operations and will not offer health insurance plans for 2016. Existing policies will be honored through the end of 2015 and all claims will be paid. As a result, approximately 59,000 members would have to shop for new coverage for 2016.

“We remain focused on providing service to our current members and working with the DOI as well as the Centers for Medicare & Medicaid Services to reverse this regulatory action.” Zumtobel, added.

Meritus is fully committed to our members, employees, physician partners and brokers while we explore alternatives with the Arizona Department of Insurance.

About Meritus
Meritus is an Arizona member-governed non-profit health insurance company operating as a COOP (Consumer Operated and Oriented Plan) established through a loan provision from HHS under the Patient Protection and Affordable Care Act. The company was created to provide more accessible and affordable health insurance coverage options to individuals, families and small businesses so that we can work together for better health. Meritus products and services are provided through Meritus Mutual Health Partners (a PPO) and Meritus Health Partners (an HMO).