The state Office of the Insurance Commissioner has ordered Evolution Services Inc. to stop selling illegal health insurance in the state, according to an announcement.
The state said the South Jordan, Utah-based company has been operating as a Multiple-Employer Welfare Arrangement. Such organizations are established to provide health and welfare benefits to employees of two or more unrelated employers who are not involved in a collective bargaining agreement.
The arrangements are exempt from regulation by the state, and from certain taxes, the state said.
The company contends that it is self-insuring its own employees, but Insurance Commissioner Mike Kreidler said his agency knows of seven small businesses that have enrolled in Evolution's health plans.
"The employers received access to the health plan in return for signing a stock option agreement with Evolution Services," Kreidler said in a statement. "Although these businesses physically retained control of their employees, the intention of the agreements was to transfer control of their company to Evolution Services in order to shirk state regulation."
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