False offers of cash subsidies used to 'capture' health insurance customers, lawsuit alleges

A health insurance operation based in Broward County, Florida, used internet ads that falsely promised cash subsidies to sign up clients across the country and replace their agents, a lawsuit contends.

The scheme was carried out by Enhance Health LLC, TrueCoverage LLC, Speridian Technologies LLC, Number One Prospecting LLC and two individuals who ran it, according to a lawsuit that seeks class action status.

The suit claims the defendants operate a criminal enterprise that targets low-income consumers who are eligible for coverage under the Affordable Care Act.

It accuses the defendants of violating the federal Racketeering Influenced and Corrupt Organizations (RICO) Act, as well as federal laws meant to prevent unauthorized entities from accessing ACA plans.

Prospects were lured in by internet ads promising free monthly subsidies that could be used for groceries, medical bills, rent and other expenses, the suit claims.

The ads, reproduced in the complaint filed on Friday in U.S. District Court in Fort Lauderdale, promised subsidies of $6,400 a month, $1,400 a month, or a flat $6,300. Ads promising $6,400 and $1,400 a month showed pictures of what looks like a debit card.

Actually, according to the complaint, consumers never receive cash from the government for signing up for ACA plans. Subsidies made available to reduce health insurance costs — called advanced premium tax credits — are paid directly by the government to insurers to offset costs of providing coverage, the suit states.

Once prospects provided personal information including names, birth dates and states of residence, agents working in call centers were instructed to follow sales scripts deflecting questions about the subsidies because the companies knew they could not be provided, the suit states.

Yet the ads succeeded, according to the complaint, in bringing prospects to agents who then “captured” many in one of three ways:

— Accessed consumers’ health insurance accounts to remove their agent of record and replace them with their own agents — “to essentially steal the original (agent’s) commissions for the policy.”

...continued

swipe to next page