After Tampa firm’s ‘sham’ health plans, feds to send nearly $100M in refunds

Federal trade officials are sending almost $100 million in refunds to customers of a Tampa company that marketed “sham” health insurance plans, authorities announced Monday.

Nearly 46,000 people in Florida will get checks, totaling about $10.2 million statewide, data shows.

The Federal Trade Commission in 2022 alleged that Benefytt Technologies and its partners used deceptive websites like “Obamacareplans.com” to target consumers looking for insurance that met Affordable Care Act requirements, then pressured and “tricked” them into buying inferior plans, according to an agency news release.

The company’s sales agents told consumers its products would cover things like preexisting conditions and prescription drugs, even though they didn’t. The services often cost hundreds of dollars a month.

People only realized they were uninsured or underinsured after they got medical bills for care they thought was covered, according to a 2022 complaint the trade commission filed in Tampa federal court.

The agency also said Benefytt Technologies, previously known as Health Insurance Innovations, regularly bundled other products into its health plans, ranging from life and accident insurance to fitness programs, with separate monthly fees that weren’t clearly disclosed to consumers. People often didn’t know they bought the extra products, and sometimes the company kept billing for them even after customers canceled their health plans, according to court records.

“All told, Defendants have cheated consumers out of hundreds of millions of dollars through the deceptive and unfair sale of their products,” the trade commission’s complaint said.

Benefytt Technologies settled the case in 2022 but didn’t admit to or deny the allegations. It agreed to pay the agency $100 million so officials could issue refunds. The Carrollwood area company’s former chief executive, Gavin Southwell, and former vice president of sales, Amy Brady, were banned from marketing and selling health care products. Brady was also prohibited from telemarketing.

The trade commission is mailing checks to more than 463,000 consumers who paid the firm $1,000 or more between 2017 and 2022. People should cash them within 90 days. The median refund is $141, according to agency data. Those with questions should contact Epiq Systems, the refund administrator, at 888-574-3126 or visit a trade commission web page with additional information about the process.

Benefytt Technologies, founded in 2008, was once one of the region’s fastest-growing public companies with over $381 million in revenue in 2019, the Tampa Bay Times previously reported. It went private in 2020 after being acquired by Madison Dearborn Partners, a Chicago private equity firm.

The company, with roughly $622 million in debt, declared bankruptcy after the trade commission case and later reorganized, court records show. It rebranded last year as Blue Lantern Health, which didn’t immediately respond to requests for comment.