Court Enters Preliminary Injunction Against Simple Health, Health Benefits One, Steven Dorfman, and Other Related Companies

Judge Darrin P. Gayles entered a preliminary injunction on May 14, 2019, enjoining Steven Dorfman, Simple Health Plans, Health Benefits One, Health Center Management, Innovative Customer Care, Simple Insurance Leads and Senior Benefits One.

The Judge appointed Michael Goldberg as Receiver. The Preliminary Injunction orders an asset freeze, the repatriation Of assets held overseas, and other relief. A copy of the Preliminary Injunction can be found here.

Significantly, the court made findings of fact, including:

• “To effectuate their bait and switch scheme, Defendants led consumers to believe they were receiving comprehensive health insurance when, in fact, they received limited indemnity plans or discount memberships.”
• Defendants made numerous misrepresentations to perpetrate their bait and switch scheme, including that:
• Defendants’ limited benefits plans and medical discount memberships are comprehensive health insurance, or the equivalent of such insurance;
• Defendants’ limited benefit plans and medical discount memberships are qualified health insurance plans under the ACA;
• Defendants are experts on, or providers of, government-sponsored health insurance policies, such as those offered pursuant to Medicare and the ACA; and
• Defendants are affiliated with AARP or the Blue Cross Blue Shield Association.

The court also found that “Defendants’ income was primarily derived from commissions for enrolling customers in Health Insurance Innovations’ (“HII”) limited benefit insurance plans. RR, at 29. From 2014 through approximately October 2018, HII paid approximately $180 million in commissions to HBO which HBO then distributed to the other receivership entities. Id.”

Under “conclusions of law” the court found that:

“[T}he record supports a finding that Defendants made a series of material misrepresentations that were likely to influence consumers’ decisions to purchase Defendants’ services. Defendants’ misrepresentations include that:

• Defendants’ limited benefits plans and medical discount memberships are comprehensive health insurance, or the equivalent of such insurance;
• Defendants’ limited benefit plans and medical discount memberships are qualified health insurance plans under the ACA;
• Defendants are experts on, or providers of, government-sponsored health insurance policies, such as those offered pursuant to Medicare and the ACA; and
• Defendants are affiliated with AARP or the Blue Cross Blue Shield Association.

These misrepresentations are likely to mislead consumers acting reasonably under the circumstances because they provide the net impression that Defendants will provide the promised services and results—namely comprehensive health insurance and/or ACA-qualified plans. See FTC v. Partners In Health Care Ass’n, Inc., 189 F. Supp. 3d 1356, 1365 (S.D. Fla. 2016) (Defendants selling medical discount card deceived consumers into believing defendants were selling insurance by using terms “like ‘copay,’ ‘premium,’ and ‘deductible’ which are commonly associated with insurance.”).