State regulators kick unauthorized health insurance provider from Minnesota market

State regulators on Tuesday suspended and fined an unlicensed health insurance provider that allegedly sold deceptive coverage plans to nearly 1,700 Minnesotans that made them employees or “limited partners” but failed to pay their medical claims.

The Texas-based business, Strategic Limited Partners, sold the unauthorized insurance plans to state residents before a cease-and-desist order entered in late 2024, according to the Minnesota Department of Commerce.

Other state authorities that have investigated the company found it classifies people who enroll in plans as employees who are supposed to install tracking applications on their phones, allowing Strategic Limited Partners to sell data to third parties. However, many do not install the apps, nor do they know they are considered some form of employee or partner.

The Minnesota order requires Strategic Limited Partners to halt all insurance operations in the state by the end of the year and pay a $40,000 fine, plus patients’ outstanding medical claims. The state can levy another $250,000 in penalties for any violations of the terms of its settlement with the state.

Strategic Limited Partners admitted no wrongdoing in the settlement. Attempts to reach the insurance provider and its chief executive for comment Tuesday were unsuccessful.

According to the Commerce Department, the business sold policies over the phone. Some targets of the sales pitches were led to believe the program was tied to MNsure, the state health care market for individual health insurance policies. Company representatives falsely told customers the plans did not have to follow state regulations and were governed under the federal Employee Retirement Income Security Act.

Customers were designated as “limited partners” or employees without their knowledge, according to the Commerce Department.

Customers paid monthly premiums up to $1,100 for plans that were advertised as covering medical and dental. The business failed to provide basic information about its plans, misrepresented the breadth of coverage and refused to pay claims, according to the department.

Two Minnesotans, identified in state documents as R.W. and M.W., reported paying more than $7,000 to Strategic Limited Partners before canceling because of the company’s failure to pay claims. Neither was aware the business made them employees or limited partners.

Another customer, identified as M.T., said Strategic paid less than $2,000 of her $40,000 in medical bills over a six-month period. Purchasers of the plans said only a small portion of claims were paid, and they faced delays or being sent to collections.

“This is a cautionary tale,” said Jacqueline Olson, an assistant commissioner of enforcement for the Minnesota Department of Commerce.

“As open enrollment begins, Minnesotans should be extremely careful when selecting health coverage,” she said in a statement. “If it sounds too good to be true, or if the company isn’t licensed in Minnesota, that’s a red flag.”

Insurance regulators in other states have taken actions to limit Strategic Limited Partners from selling insurance.

Last year Wisconsin issued a cease and desist order to Strategic Limited Partners for selling unauthorized insurance. And New Hampshire state regulators banned Strategic Limited Partners from marketing its services effective in December.

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