Health Insurance Innovations / Simple Health Class Action Lawsuit
Contact the LawyersClass Action Targets National Fraudulent Healthcare Insurance Scheme
MIAMI, June 7, 2019 — As health insurance fraud penetrates America’s healthcare industry to target vulnerable consumers, Miami-based law firm Levine Kellogg Lehman Schneider + Grossman (LKLSG) and Atlanta-based The Doss Firm filed a class action complaint against Health Insurance Innovations (HIIQ), Inc. and Health Plan Intermediaries Holdings, LLC (HPIH) for their role in the Simple Health Plans fraudulent insurance scheme.
The lawsuit alleges HIIQ and HPIH directed, aided and abetted the $150 million fraud perpetrated by Simple Health Plans, a South Florida company shut down in October 2018 by the Federal Trade Commission. The lawsuit alleges that HIIQ took part in defrauding hundreds of thousands of vulnerable consumers nationwide, leading them to believe that their limited benefit indemnity plans and medical discount plans were major medical insurance that met the Affordable Care Act requirements.
“The scheme carried out by HIIQ and HPIH through Simple Health Plans created devastating consequences for victims nationwide,” said Jason Kellogg, Partner at LKLSG. “These folks thought they were doing the right thing in purchasing health insurance. Instead, they were left mostly uninsured.”
Co-Lead Plaintiff Chris Mitchell of Kansas was left with bills exceeding $40,000 after having surgery to treat an aggressive form of cancer. Co-Lead Plaintiff Elizabeth Belin of Ohio was billed more than $48,000 in medical expenses because her limited benefit indemnity plan, which she was told was a PPO, did not cover the surgery.
Simple Health was one of the largest brokers for HIIQ, a publicly traded distributor of health insurance and supplemental plans that financed, sold plans through, acted as the third-party administrator for, and provided customer service for Simple Health.
The Federal Trade Commission warned that thousands of potentially unaware victims continue to be charged by HIIQ for plans purchased through Simple Health.
“This scheme victimized the most vulnerable patients across the country,” said attorney Jason Doss, owner of the Doss Firm. “The plaintiffs are the consumers that the Affordable Care Act was designed to protect.”
For more information, call 855-436-7752.
About the Law Firms
LKLSG is a Miami-based commercial law firm providing focused, efficient, and hands-on representation in high-stakes legal proceedings.
The Doss Firm is a Marietta, Georgia, based law firm that represents consumers and investors nationwide in class actions and arbitrations.
CONSUMER ALERT: Federal Court Orders Health Insurance Innovations to Notify Existing Customers Who Purchased Through Simple Health That “Your Healthcare Plans May Have Been Sold Deceptively”
A Florida federal judge in Florida has ordered Health Insurance Innovations (“HII”) to notify existing customers who purchased its healthcare products through Simple Health that they may have been the victim of deceptive sales practices. The notice also gives existing customers the option to cancel their healthcare plans, and opens up a special enrollment period for customers to purchase comprehensive healthcare coverage that complies with the Affordable Care Act (“ACA”).
In his Order, a link to which is found below, Judge Darrin Gayles of the U.S. District Court for the Southern District of Florida states:
There is good cause to believe that Defendants deceptively marketed and sold limited indemnity plans and non-insurance products such as medical discount or wellness plans (collectively, the “Products”) as comprehensive health insurance or its equivalent to thousands of consumers over the past five years . . . . There is good cause to believe Defendants systematically misrepresented to consumers that the Products were health insurance plans that would provide expansive coverage for all of their medical needs and result in low out-of-pocket costs, when in fact Defendants’ Products did not provide this type of coverage.
The Court noted that consumers who were deceptively sold the products by Simple Health’s agents were still being billed by third-party administrator HII.
HII, which also developed the Products and sold them through Simple Health and other agents, has been sued in a class action lawsuit, a link to which is found above. The class action lawsuit alleges that HII directed, aided and abetted Simple Health’s deceptive scheme.
The Court’s Order requires all payments made by existing customers to HII after June 13 to be held in escrow. The Order does not address the millions of dollars in payments made by customers in the past. Past payments are, however, sought in the class action described above on behalf of existing and past customers nationwide.
Both the Federal Trade Commission (the “FTC”), which brought the lawsuit against Simple Health, and the Receiver appointed by Judge Gayles to oversee Simple Health, Michael I. Goldberg, questioned HII in recent court filings for continuing to bill customers millions of dollars in premiums even after Simple Health was taken down by the FTC in late October 2018. HII ultimately supported the FTC’s petition to notify existing consumers.
The recent Order warned of the possibility that existing customers who think they have major medical insurance will incur significant medical expenses if they are not warned about the “true nature of the Products”:
There is good cause to believe that due to Defendants’ deceptive sales practices, many Existing Customers still believe that they purchased comprehensive health insurance or its equivalent from Defendants and do not know the true nature of the Products for which they are being charged. As a result, there is good cause to believe that Existing Customers are at a significant risk of incurring substantial medical debt, being unable to obtain necessary medical treatment due to the lack of coverage, or being charged on an ongoing basis for the Products without knowing their true nature. Consumers should be provided with an opportunity to make an informed decision about whether they would like to continue paying for and receiving the Products.
The first consumer notice will be sent out on June 18, 2019. A second notice will be sent out by July 2. A link to the notices and Judge Gayles’ Order Authorizing Notification to Existing Customers dated June 13, 2019 can be found here:
Class Plaintiffs Elizabeth Belin and Chris Mitchell Featured in New York Times Article About Junk Insurance
Florida Company Sued Over Sales of Skimpy Health Plans
By Reed Abelson
June 12, 2019
One Ohio resident paid $240 a month for health insurance that she later learned didn’t cover her knee replacement. Saddled with $48,000 in medical bills, she decided not to get the other knee replaced.
“It’s been devastating to me,” said Elizabeth Belin, who lives in Columbus. The bills totaled more than her annual salary.
A Kansas resident paid premiums on a policy for two years, then found out his insurance would not cover surgery for a newly diagnosed cancer.
The two policyholders have filed a lawsuit in federal court against Health Insurance Innovations, based in Tampa, Fla., accusing the company of misleading them about the kind of policy they were buying.
They say they believed they were purchasing Affordable Care Act plans that include coverage guarantees. But they were sold much less comprehensive coverage that left them vulnerable to tens of thousands of dollars in unpaid medical bills, according to the lawsuit.
Their complaints underscore problems with some types of cheaper health insurance alternatives that the Trump administration has expanded. Critics of the government’s decision, including the Association for Community Affiliated Plans and the National Alliance on Mental Illness, are also suing the Trump administration over relaxation of rules for these plans.
“This isn’t real insurance,” said Jason Kellogg, one of the lawyers representing the individuals in the Florida case. They are seeking class-action status, estimating that as many as 500,000 people may have bought these policies.
In an emailed statement, Health Insurance Innovations said the lawsuit was without merit. “We will vigorously defend ourselves against all such allegations,” the company said.
Proponents of short-term plans say they represent an affordable option for those who can’t pay for the robust coverage mandated by the federal law.
But a recent report by researchers from the Georgetown University Center on Health Insurance Reforms concluded that the lack of oversight meant that “consumers are at risk of being underinsured, with significant financial liability if a high-cost medical event occurs.”
Four states — California, Massachusetts, New Jersey and New York — have largely banned the sale of these products, and others have restricted sales of such plans, according to another analysis.
Jessica Altman, the insurance commissioner for Pennsylvania, told lawmakers at a congressional hearing this year that the state had taken action against eight companies in the last two years for misrepresenting the kind of coverage being sold.
In recent months, Congress has become increasingly concerned about consumers burdened by medical debt, putting a spotlight on surprise medical bills.
At the news conference on Wednesday, Ms. Belin and Christopher Mitchell, the plaintiffs in the lawsuit, said they had no idea they were buying junk insurance.
Ms. Belin, who was recently divorced, had been looking for an Obamacare policy in 2016. She spoke to a sales agent who offered her what she thought was an array of traditional health plans.
“He would find me a plan that would fit my budget,” she recalled being told. Instead, she was sold a limited benefit plan, which sharply capped what it paid for medical care.
Mr. Mitchell bought a similar policy the same year from a broker who promised to find the best plan in Kansas at the best price. He was found to have invasive ductal carcinoma, a type of breast cancer, in early 2018. His doctor told him that he needed surgery, but the hospital where it was scheduled told him that he did not have insurance coverage.
According to the complaint, Health Insurance Innovations participated in a scheme involving Simple Health, another Florida company, whose agents sold them the flimsy coverage. Simple Health was recently shut down by the Federal Trade Commission after regulators accused it of being “a classic bait and switch scheme,” according to court filings.
The lawsuit claims Health Insurance Innovations spent millions of dollars funding Simple Health and was intimately involved in the scripts its brokers used to sell these policies. Customers were told that they were getting a P.P.O. plan, a traditional policy that allows individuals to go to the doctor or hospital of their choice. Many of the websites that consumers visited implied the policies being offered were from brand-name insurers.
The lawsuit quotes from the scripts being used by the brokers. “What’s the point of paying all that money every month if it’s not going to cover the most important things, right???” the broker asks. “This plan covers you from Day 1 …’”
Health Insurance Innovations says it was never involved in Simple Health’s activities. While the company said it had relied on Simple Health brokers to sell policies and collected the premium payments, it required all brokers “to provide clear disclosure of the information necessary for consumers to understand the policies they purchase,” according to its statement.
“Simple Health violated the trust of its consumers, its regulators and us,” the company said, emphasizing that it was not named as a defendant in the F.T.C. case and was cooperating with federal regulators.
The company said it cut its ties to Simple Health last year after the F.T.C. took action against the company.
Health Insurance Innovations, which is publicly held, has also been embroiled in controversy with state regulators over the sale of short-term plans. Last December, it reached a settlement with state regulators over its marketing practices. The company denied any wrongdoing.
With a reported $352 million in sales last year, Health Insurance Innovations specializes in online sales of policies and has benefited from moves by the Trump administration to allow people greater access to plans that do not meet the Obamacare requirements.
But Mr. Mitchell says his experience should serve as a cautionary tale to those shopping for their own policies. “This could happen to anyone,” he said. “People need to be aware of these scams.”
CONSUMER ALERT: LKLSG Investigating Potential Lawsuit Against Health Insurance Innovations LLC Arising Out of Alleged Simple Health Scam
In a recent federal court filing, a court-appointed Receiver said he “plans to further investigate the role of Health Insurance Innovations, Inc. (“HII”) in what he termed “a classic bait-and-switch scam” perpetrated by Simple Health Plans, LLC (“Simple Health”).
According to the Receiver, Michael I. Goldberg, Simple Health was “a classic bait-and-switch scam” in which unwitting consumers were led to believe they were purchasing an Obamacare-compliant PPO policy, but were really being sold limited benefit plans that did not comply with the Affordable Care Act.
Simple Health was one of the largest brokers for HII, a publicly traded distributor of health insurance and supplemental plans. In addition to selling plans through Simple Health, HII acted as Simple Health’s third-party administrator and provided customer service for Simple Health.
The Federal Trade Commission recently warned that thousands of unaware victims may continue to be charged by HII for plans purchased through Simple Health.
In October 2018, the FTC filed a lawsuit against Simple Health and five related companies, as well as their principal Steven J. Dorfman, who is accused of spending millions of dollars toward an extravagant lifestyle. The FTC obtained an injunction against Simple Health, which it alleges engaged in a $150 million scheme.
The law firm of Levine Kellogg Lehman Schneider + Grossman LLP (“LKLSG”) in Miami is investigating potential legal action designed to help victims of the Simple Health scam. If you bought a limited benefit insurance plan through Simple Health, please contact attorney Jason Kellogg at the information above or through www.simplehealthlawsuit.com. LKLSG represents clients nationwide.
Attorney Advertising. The law firm responsible for this advertisement is Levine Kellogg Lehman Schneider + Grossman LLP (www.lklsg.com). Prior results do not guarantee or predict similar outcomes with respect to future matters. Opportunities to discuss your particular case are welcomed. All communications are treated confidentially.
About Levine Kellogg Lehman Schneider + Grossman LLP
LKLSG is a Miami-based commercial law firm providing focused, efficient, and hands-on representation in high-stakes legal proceedings including complex commercial litigation, class actions, bankruptcy and receiverships, lender/borrower litigation and workouts and labor and employment litigation.
– April 23, 2019
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