Friday, November 8, 2024
DMHC Fines Spring Health Plan $1 Million for Operating Without a State License While Offering Employee Assistance Programs
(Sacramento) – The California Department of Managed Health Care (DMHC) took enforcement action against Spring Care, Inc. (Spring Health), including a $1 million fine, for offering health care services in California without a license. The plan agreed to pay the penalty and has become licensed to legally operate in the state.
“Licensure is important because licensed plans must comply with vital patient protections in the law,” said DMHC Director Mary Watanabe. “Members of licensed plans have rights, including the ability to file a complaint. Spring Health has obtained a license to legally operate moving forward, ensuring the plan’s members are protected.”
PLAN TAKES CORRECTIVE ACTION: Spring Health acknowledged their failure to comply with the law and agreed to pay the $1 million penalty. In addition, Spring Health worked with the DMHC to get licensed so they can continue providing health care services to California-based employees legally.
BACKGROUND: Spring Health illegally operated as an unlicensed health care service plan, offering Employee Assistance Program (EAP) services to upwards of 370,000 California-based employees. Without a license, Spring Health worked with California employers to arrange for mental health services and assisted employees in obtaining care, handling member disputes and paying or reimbursing providers for health care services. Spring Health was operating as an unlicensed plan by arranging for member care with network providers while collecting a prepaid or periodic charge.
Employee Assistance Programs (EAPs) contract with employers to offer benefits to employees, which may include services for health, mental health, alcohol, and/or substance abuse problems.
WHAT MEMBERS NEED TO KNOW: The DMHC encourages health plan members having trouble getting the care they need to first file a grievance, sometimes called an appeal, with their health plan. If the member does not agree with their health plan's response or the plan takes more than 30 days to fix the problem in non-urgent cases, the DMHC Help Center can work with the member and health plan to resolve the issue. If a health plan member is experiencing an urgent issue, they should contact the DMHC Help Center immediately at 1-888-466-2219, or online at www.DMHC.ca.gov.
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About DMHC:
The DMHC protects the health care rights of more than 29.8 million Californians and ensures a stable health care delivery system. The DMHC Help Center has assisted approximately 2.9 million Californians to resolve complaints and issues with their health plan. The DMHC Help Center provides assistance in all languages and all services are free. For more information visit www.DMHC.ca.gov or call 1-888-466-2219.