FTC Fines Broker for Pushing ‘Sham’ Health Insurance Plans

Benefytt Technologies, Inc., a health insurance brokerage controlled by private equity firm Madison Dearborn Partners, LLC, will refund its customers $100 million after the Federal Trade Commission (FTC) found Benefytt knowingly defrauded consumers shopping for Affordable Care Act marketplace plans. Health care experts tell AIS Health, a division of MMIT, that similar schemes involving deceptive and exploitative sales tactics are now a common problem.

The FTC said in a press release that Benefytt misrepresented bundles of short-term, limited duration (STLD) plans and supplemental health insurance products as comprehensive plans that meet the ACA’s standard benefits requirements. Benefytt’s marketing practices were misleading, the FTC said, and involved “lying to consumers about their sham health insurance plans and using deceptive lead generation websites to lure them in.” According to the FTC complaint, Benefytt also “illegally charged people exorbitant junk fees for unwanted add-on products without their permission.”

© 2024 MMIT
Peter Johnson

Peter Johnson

Peter has worked as a journalist since 2011 and has covered health care since 2020. At AIS Health, Peter covers trends in finance, business and policy that affect the health insurance and pharma sectors. For Health Plan Weekly, he covers all aspects of the U.S. health insurance sector, including employer-sponsored insurance, Medicaid managed care, Medicare Advantage and the Affordable Care Act individual marketplaces. In Radar on Drug Benefits, Peter covers the operations of (and conflicts between) pharmacy benefit managers and pharmaceutical manufacturers, with a particular focus on pricing dynamics and market access. Before joining AIS Health, Peter covered transportation, public safety and local government for various outlets in Seattle, his hometown and current place of residence. He graduated with a B.A. from Colby College.

Related Posts

September 17

Broker Payment Transparency Rule May Trigger Policy Changes

Read More
July 6

House Committee Paints Damning Picture of Short-Term Plans

Read More
July 27

D.C. Appeals Court Upholds Short-Term Plan Rule

Read More


Sign up for publications to get unmatched business intelligence delivered to your inbox.

subscribe today