Hollywood-based sellers of "sham" health insurance plans have been shut down by the Federal Trade Commission amid charges they collected more than $100 million from consumers by misrepresenting "worthless" plans as qualified under the Affordable Care Act.
Named as defendants in the restraining order, asset freeze, preliminary injunction and appointment of a receiver are Simple Health Plans LLC, 2 Oakwood Blvd., Suite 100, Hollywood, and several affiliated companies, as well as the companies' owner, Steven J. Dorfman.
The restraining order also authorizes the seizure of more than $1 million from bank accounts controlled by the defendants, about $100,000 in jewelry, and three luxury cars including a Lamborghini, Range Rover and Rolls-Royce.
Simple Health Plans and its affiliates preyed on Americans "in search of health insurance, selling these consumers worthless plans that left tens of thousands of people uninsured," the FTC said in a news release on Friday. "Many of these consumers have incurred substantial medical expenses and have been stuck with thousands of dollars in unpaid medical bills." The release called the operation a "sham."
Federal authorities served the order on Wednesday temporarily shutting down the companies. The companies have 14 days to tell a U.S. District Court in Miami why a preliminary injunction should not be issued to keep their assets under control of a court-appointed receiver.
According to the FTC's release, the companies "misled people to think 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."
Consumers reported paying as much as $500 a month for what was actually a medical discount program or extremely limited benefit program that did not cover the promised benefits, essentially leaving the consumers uninsured, the FTC said.
The companies have been the subject of numerous complaints in recent years, both to federal and state authorities. In July 2017, Nebraska's Attorney General's Office posted an alert about Florida-based "scam artists" posing as Blue Cross and Blue Shield of Nebraska and using fake Google and Manta listings bearing Blue Cross' logo and web address, along with bogus physical addresses in Omaha. The alert named Simple Health of Hollywood, Fla., as one of the affiliated companies.
The alert stated that Simple Health would sell inexpensive insurance plans, charge consumers' credit cards monthly, but never provide insurance cards or proof of coverage. They would also make it difficult to cancel, the alert said.
In emails to Florida's Attorney General's Office, customers said the company continued to withdraw money from people's bank accounts after they canceled their policies; wouldn't mail policy information after withdrawing customers' money; and told them that purchasing a policy would prevent them from owing a tax penalty imposed on people who didn't maintain ACA-compliant insurance.
"I paid my premiums on time but now that I need them to pay some medical bills they refused," wrote Dahir Sheikhali from Blaine, Minn. "Now they claim they are not an insurance company. How can this be allowed?"
Edward Cantwell of Indianapolis, Ind., wrote: "The phone sales agents are very misleading. Several company names were given during our discussion. I really could not define what company I was dealing with. The first thing they ask is how much can you pay, not what kind of coverage you need."
"This outfit pretends to sell health insurance, but it's all a con," wrote David Corey of Moorestown, N.J. "After the initial payment of $297, I never received any insurance cards or follow-up paperwork. When you try to contact them, YOU CAN"T. Please prosecute this scam operation with all due speed."
In addition to Simple Health Plans LLC, other names listed in the restraining order are:
Health Benefits Center
Simple Health Plans
Simple Insurance Plans
Simple Home Plans
National Dental Savings
Health Center Management LLC
Innovative Customer Care LLC
Simple Insurance Leads LLC
Health Insurance Services
Senior Benefits One LLC