FTC Staff Sends Warning Letters to Healthcare Plan Marketers and Lead Generators

As open enrollment season for healthcare plans is ongoing, the staff of the Federal Trade Commission is sending warning letters to 21 companies that market or generate sales leads for such plans, providing guidance, and putting the companies on notice, about deceptive or unfair claims that likely violate laws enforced by the agency.

The letters are being sent to companies that provide marketing or advertising, including lead generation, related to Affordable Care Act Marketplace health insurance and healthcare-related products, such as limited benefit plans and medical discount programs.

“It is critical for consumers’ health and financial well-being that marketers of health plans be honest about the plans they and their partners are offering,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC has been watching this important sector closely, especially during open enrollment season, and these warning letters put companies on notice that unlawfully marketing or advertising health plans to consumers can result in serious legal consequences.”

Based on information collected by FTC staff and the agency’s enforcement experience in this area, the types of claims FTC staff warns the companies about include those that may:

• misrepresent the benefits included in a healthcare plan, including any insurance benefits;
• misrepresent that a healthcare plan is major or comprehensive medical health insurance or the equivalent of such health insurance;
• misrepresent the costs of healthcare plan; and
• falsely claim that consumers who enroll in a healthcare plan will receive free offers, cash rewards, rebates, or other incentives.

The letters provide examples of prior relevant FTC actions against marketers and lead generators that operate in this field, including Simple Health, Benefytt Technologies, Partners in Healthcare Association, and Consumer Health Benefits Association.

While the letters do not allege any wrongdoing by any of the recipients, they encourage the companies to conduct a thorough review of their advertisements to ensure they are complying with applicable laws and rules, and the letters note that the FTC is closely monitoring this marketplace for unlawful conduct that is harming consumers.