The U.S. Federal Trade Commission (FTC) recently announced that two telecommunications companies were ordered to pay a total of $145 million to settle charges related to misrepresentations that the companies allegedly made regarding comprehensive health insurance plans. According to the FTC, Assurance IQ, LLC and MediaAlpha, Inc., deceived millions of consumers who were led to purchase insurance plans that did not provide the coverage that was promised. The companies also allegedly “bombarded” consumers with telemarking calls, emails, text messages and robocalls.
The FTC reported that it reached a $100 million settlement with Seattle-based Assurance IQ for deceptively marketing and selling short-term medical (STM) and limited benefit indemnity (LBI) plans that were bundled with certain supplement products, such as prescription, dental and vision discount plans. According to the FTC’s complaint, in addition to making misleading statements about the costs and benefits associated with the plans, Assurance also allegedly billed certain consumers for these healthcare plans before obtaining their express informed consent.
The FTC reached a similar, $45 million settlement with Los Angeles-based MediaAlpha that, along with its operating subsidiary QuoteLab, allegedly used misleading advertisements that promoted non-existent government programs to attract consumers interested in purchasing health insurance to their lead generation websites. These lead generation websites allegedly used domains such as “ObamacarePlans.com” and “KentuckyHealthPlans.org” to imply that the healthcare products being sold were associated with state or federal governments or were Patient Protection and Affordable Care Act (ACA)-approved plans, when the plans often were not. According to the FTC’s complaint, these tactics were used to collect information from consumers for the purpose of selling the information to telemarketers. MediaAlpha reportedly sold approximately 119 million leads in 2024 alone.
According to the FTC, the actions by each company violated the FTC Act and the Telemarketing Sales Rule (TSR). MediaAlpha was additionally charged by the FTC with violating the Government and Business Impersonation Rule. In separate proposed court orders, each company was ordered to pay a monetary judgment that would be used to provide refunds to harmed customers. The companies were also, among other things, prohibited from making express or implied misrepresentations regarding the health plans they sold and collecting payments from consumers without their express informed consent.
FTC Press Release | Complaint (Assurance IQ) | Proposed Order (Assurance IQ)| Complaint (MediaAlpha) |Proposed Order (MediaAlpha)