Zen­e­fits will pay $3.7 mil­lion set­tle­ment over li­cens­ing is­sues

Modern Healthcare - - REGIONAL NEWS - —Joseph Conn

Zen­e­fits, the trou­bled pur­veyor of an on­line hu­man re­sources plat­form for in­sur­ance, has agreed to pay nearly $3.7 mil­lion to set­tle charges brought by Cal­i­for­nia state reg­u­la­tors.

The 4-year-old Sil­i­con Val­ley-based com­pany was dinged for al­legedly al­low­ing un­li­censed em­ploy­ees to han­dle in­sur­ance trans­ac­tions and for cir­cum­vent­ing in­sur­ance agent ed­u­ca­tion re­quire­ments, the Cal­i­for­nia In­sur­ance De­part­ment an­nounced.

Zen­e­fits, launched in 2012, has been un­der both reg­u­la­tory and me­dia scrutiny that led to the Fe­bru­ary re­sig- na­tion of Parker Con­rad, the com­pany’s co-founder and CEO. Se­rial tech en­tre­pre­neur David Sachs, for­mer chief op­er­at­ing of­fi­cer of PayPal and co-founder of Yam­mer, took the helm.

The agree­ment stip­u­lated a $3 mil­lion penalty for the li­cens­ing vi­o­la­tions and a $4 mil­lion penalty for “sub­vert­ing the pre-li­cens­ing ed­u­ca­tion and study-hour re­quire­ments for agent and bro­ker li­cens­ing,” ac­cord­ing to the agency state­ment. An­other $160,000 was paid to the state to cover its costs for in­ves­ti­ga­tion and ex­am­i­na­tion. How­ever, be­cause Zen­e­fits self-re­ported and had taken re­me­dial ac­tions, in­clud­ing re­train­ing its li­censed per­son­nel, the state agreed to cut its mone­tary penal­ties in half, sus­pend­ing the other half, which could be re­in­stated, if it fails an agreed-upon com­pli­ance re­view in 2018.

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