Class Action Lawsuit Alleges ‘Junk Insurance’ Scam
By Anne Bucher
A class action lawsuit recently filed in federal court accuses The National Better Living Association and several other groups of deceiving thousands of consumers by selling “junk insurance” plans that were advertised as providing comprehensive medical coverage but in reality had limited benefits and low caps.
The class action lawsuit, led by plaintiff Jacquelyn Weaver, also targets Allied Health Benefits, the United States Life Insurance Company in the City of New York, Health Lead Systems and Albert Cormier Solutions. Weaver alleges that these companies sought out consumers who did not qualify for or were unable to afford employer-sponsored health care plans, convincing them to purchase “worthless” policies and pay membership fees.
“This action challenges a deceptive and predatory ‘association plan’ insurance scam designed to enrich defendants at the expense of vulnerable consumers seeking individual health insurance,” the class lawsuit says. “This scheme is carried out by setting up a ‘group association,’ which is nothing more than a subterfuge to avoid regulatory oversight. Then, as part of the association’s purported ‘group benefit,’ the defendants deceptively market and sell certain worthless, junk insurance under the auspices of comprehensive, major medical insurance to consumers who cannot afford or who are ineligible for credible coverage.”
According to the class action lawsuit, Weaver submitted information through one of the defendants’ websites and received a quote for a group-based insurance policy. She says she was under the impression she was dealing with a legitimate health insurance company and that she would be provided with comprehensive medical coverage.
Weaver claims the defendants targeted individuals who, like her, could not afford comprehensive health insurance from the major providers. The class action lawsuit accuses the defendants of intentionally misrepresenting the policies as affordable health plans that provide comprehensive coverage when they were actually so limited, they were essentially worthless.
“In truth, the purported ‘coverage’ is extremely limited and essentially worthless, often leaving consumers with substantial unpaid medical bills and medical debt,” the class action lawsuit said. “This scheme, which has reaped substantial profits for the defendants, was played upon the named plaintiff and thousands of other vulnerable consumers across the United States.”
Consumers who purchased the health insurance policies, underwritten by the United States Life Insurance Company, were automatically added as members of the association and were charged membership fees on top of the insurance premiums.
According to the class action lawsuit, The National Better Living Association claims to be a membership association that offers medical insurance group benefits. Allied Health Benefits allegedly shares an address with the National Better Living Association and promotes the association’s insurance products and memberships by relying on third-party telemarketers, such as defendants Health Lead Systems and Albert Cormier Solutions.
In her class action lawsuit, Weaver says the defendants took advantage of state regulators’ lack of authority over association coverage and “limited membership plans” to carry out their scheme to deceive consumers. She seeks class certification, restitution and damages for violations of the Racketeer Influenced and Corrupt Organizations (RICO) Act, breach of contract, unjust enrichment and conspiracy.
Weaver is represented by R. Brent Irby of McCallum Hoaglund Cook & Irby.
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