A federal class action lawsuit has accused two Tampa-based health care companies of defrauding customers out of millions of dollars by misrepresenting the benefits of their insurance policies.

A complaint filed in the Southern District of Florida on Friday named Health Insurance Innovations Inc. and Health Plan Intermediaries Holdings LLC as defendants in a four-count lawsuit. The charges against the businesses include allegations of racketeering as well as aiding and abetting fraud in addition to unjust enrichment.

The plaintiffs, Elizabeth Belin and Christopher Mitchell, are being represented by attorneys Jason Kellogg and Jason Doss. According to the attorneys, the defendants unlawfully led customers to believe that the limited-benefit indemnity and medical discount plans they were offering provided the full range of medical benefits included with traditional health insurance. Kellogg, a partner with Levine Kellogg Lehman Schneider + Grossman in Miami, said the class action began with a lawsuit against South Florida company Simple Health Plans in October 2018 by the Federal Trade Commission.

“The Tampa companies … create insurance products — but it's not major medical insurance — and they sell it through third-party distributors,” he said, noting Simple Health had been one such business partner of Health Insurance Innovations Inc. and Health Plan Intermediaries Holdings. Kellogg said Simple Health would use a script to mislead customers regarding the nature of Health Insurance Innovations plans.

“If you wanted a boots-and-suspenders-type thing, you could buy this product, in case you had an event where you had to come up with a deductible,” Kellogg said. The attorney added although these plans were “not meant to cover catastrophic health injuries,” Simple Health had been advertising them as if they did. Friday's complaint alleges Health Insurance Innovations Inc. and Health Plan Intermediaries Holdings loaned Simple Health “millions of dollars to fund its operations,” in addition to training its customer service agents and providing the company with “extremely generous commissions.” The lawsuit contends Health Insurance Innovations “paid about $180 million in commissions to Simple Health” between 2014 and October 2018.

Read the class action complaint:

Doss, who practices in Atlanta as the owner of the Doss Firm, said companies such as Health Insurance Innovations and Simple Heath are victimizing the very people the Affordable Care Act had been designed to protect.

“People who don't have good health care through their employer are being targeted all over the country,” he said. “Consumers are being misled as to what the features of their product are.”

The named plaintiffs only discovered the true extent of their benefits once hospitals informed them of how much they owed for necessary medical procedures, attorneys said.

Kellogg told the Daily Business Review the class comprises consumers around the U.S. who purchased Health Insurance Innovations coverage through Simple Health between 2013 and 2018. The attorney said he and Doss believe roughly half a million customers purchased a Health Insurance Innovations plan during the company's partnership with Simple Health.

Noting the $180 million given to Simple Health by Health Insurance Innovations, the attorneys said they are hoping to award victims of the alleged scheme in part with the premiums and fees they had to pay on medical bills. Doss noted the defendants reaped “hundreds of millions” in profit, and any class action award will be contingent on the extent of the purported fraud and the damages incurred by class members.

No attorney has entered an appearance for the defense. Garry O'Donnell, with Greenspoon Marder's Boca Raton office, has represented the defendants on past matters, but did not respond to requests for comment by press time.

Doss and Kellogg suggest they expect to learn more about the reach and impact of the alleged scheme during the discovery period.

“It may came to light that Health Insurance Innovations used other distribution channels other than Simple Health to perpetuate this fraudulent scheme,” Doss said. “We've given ourselves leeway in the complaint to broaden the scope.”

Kellogg said, “We know Simple Health was the largest, but if there are others …”

Doss finished for him: “We'll find out.”

Read the complaint:

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