At the request of the Federal Trade Commission (“FTC”), tens of thousands of consumers who bought medical discount plans from Simple Health Plans LLC that the FTC alleged were deceptively marketed as comprehensive health insurance, and who still are paying monthly fees, will be notified that they do not currently have comprehensive health insurance but that they can enroll in a comprehensive plan during a special enrollment period.
The notices were authorized by the U.S. District Court for the Southern District of Florida, which is overseeing a lawsuit filed last year by the FTC against Simple Health, in which the agency alleged that the company collected more than $100 million by selling Americans worthless plans that left tens of thousands of people uninsured.
The notices to Simple Health customers who still are paying will state that their products are “not comprehensive health insurance” and that, “If you get sick or have to go to the hospital, you may have to pay almost all of your medical bills.” The notices will provide a phone number and a link to a website where consumers can cancel their products and stop the monthly billing. The notices also will inform consumers that the Centers for Medicare and Medicaid Services, a federal government agency, is offering them a special enrollment period to apply for comprehensive health insurance and will provide instructions on how to do so.
The FTC said that the consumers who were deceived by Simple Health and still are paying are billed by a third party administrator, Health Insurance Innovations, Inc. (“HII”), which is not a defendant in the FTC's case against Simple Health.
“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,” Florida District Judge Darrin P. Gayles wrote in an order authorizing the notices. “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.”
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].