WASHINGTON, D.C. — The Federal Trade Commission (FTC) announced it recently secured a $195 million judgment against Simple Health Plans LLC and its CEO, Steven J. Dorfman. The ruling comes after the FTC charged the company with misleading consumers into purchasing fraudulent health care plans.
According to the court’s ruling, Florida-based Simple Health Plans and Dorfman deceived customers into believing they were acquiring comprehensive health insurance. The supposed coverage included benefits for preexisting medical conditions, prescription drugs, primary and specialty care treatment, inpatient and emergency hospital care, surgical procedures, and medical and laboratory testing. However, the reality was starkly different.
Many enrollees reported paying up to $500 per month for what turned out to be a medical discount program or an extremely limited benefit program. Far from the promised benefits, these programs often left consumers with thousands of dollars in uncovered medical bills. In some cases, consumers found themselves unable to access necessary healthcare due to lack of coverage.
The Federal District Court in the Southern District of Florida, in granting the FTC’s motion for summary judgment, also banned Simple Health, five related entities, and Dorfman from telemarketing and marketing, promoting, selling, or offering any healthcare products.
Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, said, “Simple Health preyed on consumers by selling them bogus health care insurance that cost them thousands of dollars for ‘benefits’ that in fact left consumers unprotected. We are pleased the court recognized this blatant bait and switch and ordered the company and its CEO to turn over the money they bilked from consumers.”
The court ruling confirmed that Dorfman and Simple Health, along with Health Benefits One LLC, Health Center Management LLC, Innovative Customer Care LLC, Simple Insurance Leads LLC, and Senior Benefits One LLC, violated the FTC Act and the agency’s Telemarketing Sales Rule.
The court has ordered the liquidation of all their assets, which have been frozen since November 2018. The proceeds are to be turned over to the FTC, which is expected to use this money to provide refunds to consumers. The order also prohibits any misrepresentations in the sale of any goods or services. The defendants are further prohibited from collecting any money for any healthcare product they previously sold and are required to destroy any personal information they collected about their customers.
In February 2021, Simple Health’s Chief Compliance Officer, Candida Girouard, agreed to settle the FTC’s charges. As part of that settlement, Girouard is banned from marketing, promoting, or selling any healthcare-related products, from making misrepresentations in connection with the sale of any good or service, and from violating the FTC’s Telemarketing Sales Rule.
The litigation was handled by Elizabeth Scott, Joannie Wei, Purba Mukerjee, and Jim Davis from the FTC’s Midwest Regional office.
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