Massachusetts Attorney General Martha Coakley has obtained civil judgments against two New Jersey companies and three New Jersey individuals for fraudulently marketing and selling a discount health plan as health insurance to Massachusetts consumers. (Read consumer complaints about health plans).
The judgments order restitution for consumers and preventive measures to ensure the defendants’ future compliance with the law.
Under the judgments, National Alliance of Associations, Professional Benefit Consultants, Inc., Thomas Sullivan, James Doyle and Christopher Ashiotes are ordered to pay Massachusetts consumers $147,920 in restitution and to pay the Commonwealth $285,000 in civil penalties and $43,800 in attorneys’ fees.
The judgments also permanently prohibit the defendants from marketing or selling a product that is not a health plan as health insurance; misrepresenting any product, including association memberships, as health insurance; violating regulations issued by the Attorney General governing discount health plans and discount health plan organizations; and sending unsolicited facsimiles to Massachusetts consumers.
“Massachusetts residents are required to have health insurance and are presented with a wide range of coverage options. It is critical that companies that offer any kind of medical coverage plans or medical discount cards clearly disclose what their plans do and do not offer, and whether they fulfill the individual mandate,” Coakley said.
“Our office has received numerous complaints from consumers who have fallen victim to these deceptive discount health plan scams where companies purport to offer health insurance but do not and we will continue to investigate and prosecute those companies that engage in these types of fraudulent business practices.”
In April 2009, the Attorney General’s Office filed a lawsuit in Suffolk Superior Court against the defendants, alleging that they sent unsolicited facsimiles advertising: “LOW COST QUALITY HEALTH CARE FOR THE INDIVIDUAL & ENTIRE FAMILY,” and “TOP RATED INSURANCE.” According to the complaint, the defendants sought to convince consumers that they were offering health insurance, although the product was not health insurance and the companies were not licensed to provide health insurance in Massachusetts.
The complaint further alleged that the defendants misrepresented that their products satisfied the Massachusetts insurance mandate.
