A Florida payer is accusing five businesses who sell or market health plans of unlawfully providing policies associated with Native American tribes to circumvent state laws.
In court documents filed May 31, the plaintiff, Deerfield Beach, Fla.-based Health Option One, said the five businesses schemed to sell tribal plans to residents across 11 states and Washington, D.C. The plans were provided by West Valley City, Utah-based Sovereign Nations Insurance, which was established to follow tribal laws, not state.
"The scheme is nothing short of a bald-faced attempt to reap illegal profits by circumventing the regulation of insurance by the states," the lawsuit said. "It must be stopped."
The five named businesses include Tinton Falls, N.J.-based First Enroll, Miami Lakes, Fla.-based Kratos Investments, Beeman's Future, RM7 Services and Infinix Media. The latter three businesses are based in Fort Lauderdale, Fla. Sovereign Nations Insurance was not named as a defendant.
The lawsuit alleges RM7 Services would generate business leads on individuals who visited its website and sell those leads to Infinix, which would then sell the leads to Kratos. Kratos is owned by the same person who owns Beeman's Future, which would buy the leads from Kratos with the company credit card. Kratos would then contact potential members about the Sovereign Nations health plans through a contract with First Enroll, who administers Sovereign Nations plans, according to the lawsuit.
Marketing and selling the Sovereign Nations plans violates the McCarran-Ferguson Act, which allows states to regulate insurance plans, according to the lawsuit.
The lawsuit also says the businesses violated the Lanham Act and unfair competition laws when they sold or marketed Sovereign Nations plans. The plaintiff is seeking damages for an undisclosed amount and a ban on the businesses "continuing any conduct which amounts to a violation of New Jersey and other applicable laws and/or regulations."