FTC to send $100M in refunds to consumers who bought Benefytt ‘sham’ health plans
Benefytt Technologies, operating under various names such as Health Insurance Innovations, used aggressive marketing in a scheme to lure consumers in search of Obamacare health plans, says the Federal Trade Commission.
The Federal Trade Commission is refunding nearly $100 million to consumers who purchased fake health plans marketed by Benefytt Technologies as comprehensive health insurance or an Obamacare plan under the Affordable Care Act.
Benefytt, which operated under various names, such as Health Insurance Innovations, used aggressive marketing and fraudulent websites in a scheme to lure consumers in search of health insurance into buying bogus policies with high monthly fees, according to the FTC’s complaint in August 2022. After buying the bad insurance, which offered little coverage, customers often were billed for additional items they never agreed to purchase, even if they had requested a cancellation.
Sales agents pitched Benefytt’s sham plans even though they were not ACA-qualified health plans and lacked key elements, the FTC said. Consumers were led to believe that they were buying comprehensive health insurance and were then charged hundreds of dollars per month for Benefytt products and services that often left them unprotected in a medical catastrophe.
One plaintiff said in court filings that he paid a $155 enrollment fee and a monthly premium of more than $205. However, he found himself owing more than $40,000 after surgery for an aggressive form of cancer not covered by the insurance product. Another plaintiff said she was damaged financially because the insurance product left her owing more than $48,000 in medical and hospital bills following knee replacement surgery.
“Benefytt pocketed millions selling sham insurance to seniors and other consumers looking for health coverage,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in a statement at the time the original complaint was filed.
Benefytt agreed to pay roughly $100 million toward providing consumers refunds as part of its settlement, which also permanently bans former CEO Gavin Southwell and former vice president Amy Brady from selling or marketing any health care-related products. Brady also is banned from telemarketing as part of the settlement.
Related: $150M lawsuit targets misleading ACA insurance policies
The FTC is sending checks to 463,629 customers who paid Benefytt $1,000 or more between 2017 and 2022. The agency provided these guidelines for how to receive a refund:
- Customers who paid Benefytt $1,000 or more between 2017 and 2022 will get some money back.
- As with most FTC cases, affected customers are not required to file a claim.
- Checks will be mailed automatically and should arrive within the next two weeks.
- Once received, refund checks should be cashed or deposited as soon as possible, because they expire after 90 days.
- Consumers can call the refund administrator, Epiq Systems, at (888) 574-3126, for more information.