Simple Health Plans LLC And CEO Ordered To Pay $195 Million For Selling Sham Health Insurance

FTC charged that Simple Health claimed to offer health care insurance with comprehensive coverage and instead effectively left most consumers uninsured

NEW YORK: The FTC charged Simple Health with misleading people into thinking they were buying comprehensive health insurance that would cover preexisting medical conditions, prescription drugs, primary and specialty care treatment, inpatient and emergency hospital care, surgical procedures, and medical and laboratory testing. However, most enrolled consumers reported paying as much as $500 per month for a medical discount program or minimal benefit program that did not deliver the promised benefits and often left consumers with thousands of dollars in uncovered medical bills.

In a complaint filed in 2018, the FTC said that Florida-based Simple Health misled people into thinking they were buying comprehensive health insurance that would cover preexisting medical conditions, prescription drugs, primary and specialty care treatment, inpatient and emergency hospital care, surgical procedures, and medical and laboratory testing. In reality, most consumers who enrolled reported paying as much as $500 per month for what was actually a medical discount program or minimal benefit program that did not deliver the promised benefits and often left consumers with thousands of dollars in uncovered medical bills, or worse yet, unable to get necessary healthcare.

The court found that Dorfman and Simple Health, along with Health Benefits One LLC, Health Center Management LLC, Innovative Customer Care LLC, Simple Insurance Leads LLC, and Senior Benefits One LLC violated the FTC Act and the agency’s Telemarketing Sales Rule. 

In granting the FTC’s motion for summary judgment, the Federal District Court in the Southern District of Florida found that Simple Health, along with Health Benefits One LLC, Health Center Management LLC, Innovative Customer Care LLC, Simple Insurance Leads LLC, and Senior Benefits One LLC violated the FTC Act and the agency’s Telemarketing Sales Rule. The court ordered that all of their assets, which have been frozen since November 2018, be liquidated and all the proceeds be turned over to the FTC, which is expected to use the money to refund consumers.

The court also prohibited any misrepresentations in the sale of any good or service and required the defendants to destroy any personal information they collected about their customers. Simple Health’s Chief Compliance Officer Candida Girouard agreed in February 2021 to settle the FTC’s charges and is banned from marketing, promoting, or selling any healthcare-related products, from making misrepresentations in connection with the sale of any good or service, and from violating the FTC’s Telemarketing Sales Rule.

Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, said, “Simple Health preyed on consumers by selling them bogus health care insurance that cost them thousands of dollars for ‘benefits’ that left consumers unprotected. We are pleased the court recognized this blatant bait and switch and ordered the company and its CEO to turn over the money they bilked from consumers.“

The litigation was handled by Elizabeth Scott, Joannie Wei, Purba Mukerjee, and Jim Davis from the FTC’s Midwest Regional office.

The Federal Trade Commission works to promote competition and protect and educate consumers. Learn more about consumer topics at consumer.ftc.gov, or report fraud, scams, and bad business practices at ReportFraud.ftc.gov.