The Federal Trade Commission is warning 25 companies that market healthcare plans or generate sales leads to review their advertising practices as the agency increases scrutiny during open enrollment.
The FTC sent warning letters to companies that market or advertise ACA marketplace insurance and other healthcare products, including limited benefit plans and medical discount programs, according to an Oct. 29 news release. The agency said it expects to send additional letters on a rolling basis.
The letters do not allege wrongdoing by the recipients. Instead, the FTC is putting companies on notice that deceptive or unfair marketing practices can violate federal law and encouraging them to conduct comprehensive reviews of their advertising, websites, social media, promotional materials and third-party marketing relationships.
The agency highlighted four types of claims that could violate the law:
- Misrepresenting the benefits or limitations of a healthcare plan.
- Presenting a limited benefit or other healthcare product as major or comprehensive medical insurance when it is not.
- Misrepresenting the cost of a health plan.
- Falsely claiming enrollees will receive free offers, cash rewards, rebates or other incentives.
“Open enrollment is not an invitation to misrepresent what their plans actually cover,” Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, said in the release.
“Making healthcare more transparent and affordable is a top priority for the FTC,” Christopher Mufarrige, director of the FTC’s bureau of consumer protection, said in an Oct. 29 news release. “The FTC will remain focused on monitoring this market and will not hesitate to hold accountable companies that unlawfully market or advertise healthcare plans to consumers. Today’s letters remind companies that open enrollment is not an invitation to misrepresent what their plans actually cover.”
The warning extends beyond how plans are described online or in advertisements. The FTC said companies should also review their telemarketing practices.
Under the Telemarketing Sales Rule, sellers and marketers generally may not initiate certain prerecorded calls intended to sell products, including health insurance, without proper consent. The rule also restricts calls to consumers on the National Do Not Call Registry, subject to certain exceptions.
The FTC also warned companies against falsely posing as government agencies, insurers or other businesses, or misrepresenting an affiliation, endorsement or sponsorship. The agency said it will continue monitoring the healthcare-plan marketing market and pursue enforcement action when warranted.
The FTC did not disclose the names of the health plan marketers it sent warning letters to.
At the Becker's 5th Annual Fall Payer Issues Roundtable, taking place November 2–3 in Chicago, payer executives and healthcare leaders will come together to discuss value-based care, regulatory changes, cost management strategies and innovations shaping the future of payer-provider collaboration. Apply for complimentary registration now.
