Feds crack down on healthcare company over ‘sham’ insurance plans | Business Observer

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Tampa healthcare company Benefytt Technologies, along with two subsidiaries and two former executives, have to be under fire of a federal agency for, according to a press release, lying to consumers about “fictitious” health insurance plans and using deceptive lead generation websites, such as “Obamacareplans.com”, to stimulate the sales.

The Federal Trade Commission ordered the company to refund $100 million to customers, who the agency says were also charged exorbitant junk fees for add-on products without their permission — violations of the Restore Online Shoppers Act Confidence Act.

Former CEO Gavin Southwell and former VP of Sales Amy Brady will be permanently banned from selling or marketing any healthcare-related product, while Brady will be banned from engaging in any form of telemarketing now and at the future, the statement said.

“Benefytt has made millions by selling fictitious insurance to senior citizens and other consumers seeking health coverage,” Samuel Levine, director of the FTC’s Consumer Protection Bureau, said in the statement. “The company is ordered to pay $100 million and we hold its executives responsible for this fraud.”

Benefytt customers, the statement said, were led to believe they were buying comprehensive health insurance, but were often billed hundreds of dollars a month for products and services that left them unprotected in the event of a medical catastrophe.

The company, its subsidiaries and former executives have accepted the court order, the statement said. The order was filed in the U.S. District Court for the Central District of Florida.

Formerly known as Health Insurance Innovations Inc., the company changed its name to Benefytt Technologies in 2020. It also changed its stock symbol from NASDAQ to BFYT, although it no longer appears to be publicly traded. In June, the company hired Todd Baxter as its new CEO.


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