Please note: As of January 20, 2021, information in some news releases may be out of date or not reflect current policies.

News Release

Secretary Elaine L. Chao Announces Assistance to Help Small Businesses Avoid Health Benefit Scams

Advocates Stronger Protections and Greater Access to Health Benefits

Archived News Release — Caution: Information may be out of date.

WASHINGTON, D.C. -- Secretary of Labor Elaine L. Chao today announced a program to help small businesses protect their employees when purchasing health insurance. The Secretary also reaffirmed the Administration’s support for Association Health Plan legislation to improve access to affordable quality health care as well as aggressive enforcement of existing health benefits laws.

“The Administration recognizes that employers want to provide access to affordable quality health benefits for workers and their families,” said Chao. “Unfortunately, operators of insurance scams continue to prey on small businesses who are lured by offers of cheap coverage.”

In an effort to educate small businesses, Chao wrote to over 80 business leaders and associations requesting them to distribute and follow simple tips entitled “How to Protect Your Employees When Purchasing Health Insurance.” The tips encourage small businesses to exercise caution by doing such things as comparing coverage and costs, checking with state insurance commissioners, and asking for references of other employers enrolled with a health provider.

“Until small businesses have meaningful access to affordable quality health care coverage, they will continue to be vulnerable to health insurance scams,” said Chao. “That is why the President strongly supports legislation creating Association Health Plans (AHPs). AHPs would afford small businesses the same bargaining power, administrative efficiencies, benefit design, and benefits of risk pooling through their association or business organization that currently are available to large employers and union-sponsored plans.”

Chao said, “The department will continue to devote significant resources to enforcing existing health laws and to work with state insurance departments in vigorously pursuing insurance scams and risky multiple employer welfare arrangements (MEWAs) to protect workers and their families.“

There are approximately 2.6 million private-sector health plans providing benefits to 56.7 million workers. To date, the department has recovered over $115.7 million through 478 civil and criminal investigations into MEWAS that affected 1.75 million participants and their families.

Questions or problems with health benefits may be directed to the department’s Pension and Welfare Benefits Administration by calling 1–866-275-7922 or electronically at

Archived News Release — Caution: Information may be out of date.

Office of Public Affairs
August 6, 2002
Release Number