Californian Arrested in Medical Insurance Scheme

California Insurance Commissioner Steve Poizner announced the arrest of a Ventura resident for grand theft of more than $163,000. Angela Meza, 45, was arrested today at her home by California Department of Insurance investigators. Meza was booked at the Ventura County jail.

CDI Investigation Division officials reportedly discovered that Meza, who owned and operated Tyler-Lawrence, Inc., had been acting as an unlicensed COBRA and Flex Plan administrator for more than 80 employers. She received more than $500,000 from employers and employees that were intended to pay premiums for COBRA insurance providers or Flex Plan accounts. Instead, Meza reportedly pocketed more than $163,000.

The Consolidated Omnibus Reconciliation Act of 1986 (COBRA) allows for a continuation of group health care benefits under a group plan, when benefits would otherwise be terminated. COBRA participants must pay the entire cost of the health care coverage.

IRS Section 125 Cafeteria Plan, or a "Flex Plan,"allows a participant to set aside a portion of their salary, before taxes, to pay dependent care costs and medical expenses not covered by health insurance. A Flex Plan has very stringent guidelines and requires a plan administrator. The administrator places the money into a trust account until a claim is filed by the participant. Many employers use outside administrators to manage their COBRA and Flex Plan programs.

Investigators determined that once Meza was retained by an employer to administer their COBRA funds, she would arrange with the insurers to send all of the COBRA premium billing notices directly to her.

Meza then reportedly failed to forward premiums to insurers and successfully concealed the theft until employees began receiving cancellation notices for non-payments.