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.”

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Peter Johnson

Peter Johnson

Peter has been a reporter for nearly a decade. Before joining AIS Health, Peter covered a wide variety of topics in his hometown of Seattle, where he continues to live. Peter’s work has appeared in publications including The Atlantic and The Stranger. Peter attended Colby College.

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