If you enrolled in a short-term health plan, you could get a refund


Short-Term plans: buyer beware

There’s $100 million sitting in a bank in Washington D.C. waiting for 463,629 consumers to take their share.

The refund money is the final peg of the Federal Trade Commission (FTC)’s investigation of Benefytt Technologies over health plans the company marketed in the Medicare and IFP (individual and family) plans categories.

According to the FTC’s August 2022 complaint, Benefytt and its third-party partners operated a series of deceptive websites that targeted consumers who were searching for comprehensive health insurance plans, qualified under the Affordable Care Act. Benefytt's sales agents were accused of misrepresenting their plans, which were not ACA-qualified and lacked key coverage elements. The company charged consumers hundreds of dollars per month for their products and services, including exorbitant junk fees.

But Benefytt – or its former CEO and head of sales – won’t be doing this again. The settlement also required Benefytt to pay $100 million and prohibited the company from lying about its products or charging illegal junk fees. Additionally, separate orders permanently banned Benefytt’s former CEO and vice president of sales from selling or marketing any healthcare-related product.

How you can get your money

The FTC is now preparing the 400,000-plus checks to go out in the mail, and if you were a member of any Benefytt-related plan, you should get your check automatically, but you’ll need to cash it within 90 days.

Consumers who have questions about their payment should contact the refund administrator, Epiq Systems, at 888-574-3126 or visit the FTC website to view frequently asked questions about the refund process. The Commission never requires people to pay money or provide account information to get a refund.

Be careful about short-term health plans

Short-term healthcare plans became a popular item during the Trump administration, when Congress expanded short-term plans to up to three years to offer consumers some ying to the yang of Obamacare standards and give people in transition – like students and those between jobs – some temporary coverage.

The idea wasn’t exactly a home run, though. At least a dozen states banned short-term insurance policies.

If you need a short-term health plan, there are things you need to consider, like out-of-pocket costs.

Short-term plans may have lower premiums, but they often have high deductibles and out-of-pocket maximums. Added together, that means you're on the hook for a larger share of your medical costs before the plan ever kicks in.

Short-term plans might seem like a bargain initially, but they may not provide the coverage you need when you need it most – maternity care, mental health services, or prescription drugs, for example. Consider your health situation and weigh the potential risks before opting for a short-term plan.

Pre-existing condition issues can be an problem, too. If you sign up for a short-term plan and you’ve got COPD written up on your healthcare record somewhere, you might be denied coverage or charged extra. Worse yet, if you get sick while covered, you might be denied renewal when your term ends.

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