Is it insurance? Putting a premium on truth

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If you’re one of the millions of Americans who’s self-employed, healthcare costs remain a concern.  So a phone call pitching what sounds like comprehensive health insurance coverage might attract your interest.  Except that according to the FTC and the Tennessee Attorney General, what United States Benefits LLC was selling wasn’t really health insurance.

In their lawsuit, the FTC and the AG alleged that United States Benefits bought the contact information of people who had expressed interest in finding out more about major medical health insurance plans. Telemarketers told people that for a one-time fee of between $100 to $500 and a monthly payment ranging from $300 to $1,300, United States Benefits would provide an affordable insurance plan, including prescription drug discounts and dental and vision care. According to the complaint, representatives often called the monthly payments “premiums” and told people they sold insurance plans on behalf of companies like Blue Cross/Blue Shield.  Pre-existing conditions?  Not a problem, said the reps.

Only after people had given their bank account information or credit card number did they learn that what the company was peddling wasn’t health insurance, but rather membership in a “benefits association” that was supposed to give them pre-negotiated discounts for various medical services. However, according to court papers, when the “members” went to hospitals, doctors’ offices, or pharmacies, they found out they weren’t entitled to any discount or got a discount considerably less than what they’d been promised.  When they tried to cancel or get their money back, United States Benefits ignored them, said the FTC.

To settle the charges, United States Benefits and two corporate officers agreed to a lifetime ban from promoting any health care-related benefits or discount programs or helping others in that business.  In addition, they can’t misrepresent the benefits, costs, performance, restrictions or cancellation policies of anything they sell and can’t falsely claim government affiliation or approval.  They’re also barred from violating Do Not Call and from placing illegal robocalls.

What about a financial remedy?  The order imposes a judgment of more than $15 million, which will be suspended upon the surrender of all corporate assets, a parcel of land, bank accounts, seat licenses for Tennessee Titans season tickets, a Harley Davidson, and a wine collection. The Hummer H2 and Lexus? They’re going back to the lenders.

In addition to working closely with the Tennessee AG, the FTC acknowledged the help of the Tennessee Department of Commerce and Insurance.

In the market for health insurance for yourself or your small business?  Learn how to spot the telltale signs of a fraudulent medical discount plan.

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