Assurance IQ, LLC and MediaAlpha, Inc. will pay a total of $145 million to settle Federal Trade Commission charges that they misled millions of consumers seeking to buy comprehensive health insurance. In two separate actions, the FTC alleged that both Assurance and MediaAlpha deceived consumers and led them to purchase plans that did not provide the promised health care coverage, and bombarded consumers with telemarketing and robocalls.
“Coherently and systematically addressing unlawful lead generation is a priority for the FTC. That’s especially so in connection to health insurance, one of the most expensive and important products consumers buy to protect themselves and their families. Consumers should receive accurate, truthful, and non-misleading information about the coverage insurance provides,” said Christopher Mufarrige, Director of the Bureau of Consumer Protection. “The FTC will take action when lead generators or other sellers break the law and harm the American people.”
Assurance IQ, LLC
Founded and operated by Michael Rowell and Michael Paulus, Seattle-based Assurance IQ, LLC, also doing business as Assurance, Assurance IQ, and National Family Assurance Corporation (collectively, Assurance), used telemarketing to deceptively market and sell health plans, specifically short-term medical (STM) and limited benefit indemnity (LBI) plans bundled with supplemental products like telemedicine plans, prescription discount plans, and dental and vision discount plans.
According to the FTC’s complaint, Assurance’s telemarketers made deceptive statements to consumers about the health plans’ actual costs and benefits, including that they provided coverage for preexisting conditions, did not have caps on benefits, allowed access to medical provider networks that would lower consumers’ costs significantly, and incorporated supplemental products. The complaint also alleges that Assurance unfairly charged consumers without first getting their express informed consent. The FTC alleges that this conduct violated the FTC Act and the Telemarketing Sales Rule (TSR).
The proposed court order announced today resolving the FTC’s allegations imposes a $100 million judgment against Assurance for violating the TSR which will be used to provide refunds to consumers. It also prohibits Assurance from making a range of express and implied misrepresentations relating to health plans, including:
- the extent of and limits on coverage and benefits;
- the costs to the consumer to buy, receive, use, cancel, or return a health plan;
- that any plan, product, or service is included at no additional cost with the purchase of a health plan;
- that any health plan is Affordable Care Act-compliant insurance or comprehensive health insurance; and
- that any health plan gives consumers access to provider networks that will reduce their medical bills and expenses.
The order also requires that Assurance have competent and reliable evidence to substantiate any claim it makes regarding any health plan and to truthfully disclose actual costs and any limitations on the use or benefits of any health plan it offers. In addition, the order bars Assurance from billing consumers for any health plan before getting express informed consent and from violating the TSR.
The Commission vote approving the complaint and proposed stipulated final order against Assurance was 3-0. The FTC filed the complaint and proposed order in the U.S. District Court for the Western District of Washington at Seattle.
The staff attorneys on this matter have been Ben Halpern-Meekin and Stephen Fairchild of the FTC’s Northwest Region.
MediaAlpha
Los Angeles-based MediaAlpha, Inc. and its operating subsidiary QuoteLab (collectively, MediaAlpha), use advertisements and websites claiming to provide health insurance quotes to collect information from consumers looking for insurance, so the information can be sold to telemarketers. In 2024, MediaAlpha sold approximately 119 million leads about consumers.
According to the FTC’s complaint, MediaAlpha has attracted consumers to their healthcare-related lead generation websites using misleading domains such as “ObamacarePlans.com” that imply they are associated with the government and claim that consumers will be able to buy low-cost, comprehensive health insurance that complies with the ACA.
The FTC also alleged that MediaAlpha has hired actors and celebrities to promote a non-existent government “Health Insurance Give Back Program” to drive consumer traffic to its health sites. MediaAlpha even paid a doctor to appear in scripted “advertorial” news segments and suggest that “millions of Americans … were able to qualify for a great health plan for $1 a day” using the defendants’ lead generation services.
Many consumers, including those whose phone numbers were listed on the national Do Not Call Registry, were flooded with robocalls and telemarketing calls that made false and misleading claims about the health care plans provided by MediaAlpha’s partners, who in fact rarely provided the low-cost comprehensive health care plans that Media Alpha promised, according to the complaint. The FTC alleged that MediaAlpha violated the FTC Act, the TSR, and the Impersonation Rule.
The proposed court order resolving the FTC’s allegations imposes a $45 million judgment against MediaAlpha, which will be used to provide refunds to harmed consumers. The order also:
- permanently bars MediaAlpha from making the types of deceptive claims alleged in the FTC’s complaint, including misrepresentations regarding government affiliation, endorsements and the amount of time consumers have to act;
- prohibits the defendants from misrepresenting the costs or features of the goods or services they or their partners sell and requires competent and reliable evidence supporting any claims the defendants make about those goods or services;
- requires the defendants to implement robust monitoring practices to ensure that they and their partners comply with the law in the future;
- requires MediaAlpha to turn over various allegedly deceptive web domains, including GovernmentHealthInsurance.com and ObamacarePlans.com, and to clearly and conspicuously notify consumers that any healthcare-related website it operates in the future is not affiliated with or endorsed by the government; and
- requires the defendants to obtain consumers’ express informed consent to collect, sell, or disclose any personal information.
The Commission vote approving the complaint and proposed stipulated final order against MediaAlpha and QuoteLab was 3-0. The FTC filed the complaint and proposed order in the U.S. District Court for the Central District of California.
The staff attorneys on this matter are Matthew Schiltz and Rachel Granetz of the FTC’s Midwest Region.
NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court. Stipulated final orders have the force of law when approved and signed by the District Court judge.