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Massachusetts’ Suffolk Court ordered UnitedHealth affiliates to pay $165 mn in penalties

Massachusetts’ Suffolk Superior Court ordered UnitedHealth affiliates to pay $165 mn in penalties

Massachusetts’ Suffolk Superior Court ordered three UnitedHealth Group Inc. affiliates to pay $165 mn in penalties for deceptive practices, according to the state attorney general.

Attorney General Andrea Joy Campbell announced today that her office has obtained a favorable order from Suffolk Superior Court against three UnitedHealth insurance companies, HealthMarkets, Inc. and its subsidiaries, The Chesapeake Life Insurance Company, and HealthMarkets Insurance Agency, Inc. f/k/a Insphere Insurance Solutions, Inc., requiring them to pay over $50 mn in restitution for Massachusetts consumers and over $115 mn in civil penalties to the Commonwealth for misleading consumers. Each of the defendants is owned by UnitedHealth Group.

The Court’s order is believed to impose the largest total of civil penalties in an action brought by the Attorney General’s Office under the Massachusetts Consumer Protection Act.

Notably, in light of evidence that the defendants intentionally targeted “vulnerable consumers who could least afford their products,” the Court found that the companies’ deceptive conduct was “particularly egregious.”

In 2020, the state alleged the companies violated consumer protection laws by misleading consumers into buying unnecessary health insurance products. The Superior Court found the companies also breached a 2022 consent judgment by continuing to deceive consumers about their agents and products. The companies misrepresented their agents as objective and claimed they represented all carriers.

For years, the defendants preyed on financially vulnerable individuals, deceiving them into buying products they didn’t need or couldn’t afford. This order holds the companies accountable and will provide meaningful restitution to consumers across the Commonwealth

Attorney General Andrea Joy Campbell

Sales agents falsely bundled supplemental health insurance with major medical policies. Consumers received quotes combining premiums for both products, giving the impression they were purchasing comprehensive coverage. The court noted the companies targeted vulnerable consumers who could least afford such practices.

Additional court proceedings will address investigation and attorney fees, along with further injunctive relief. UnitedHealthcare announced plans to appeal, claiming the decision contradicts Massachusetts law and lacks evidentiary support.

In April 2022, the Superior Court found all three defendants liable for violating the prior consent judgment and the Massachusetts Consumer Protection Act. 

The Court found that the companies deceived consumers both about their sales agents and the insurance products they were selling; deceptively advertised claims that their sales agents were objective and that they represented all insurance carriers; and that the companies’ claims of objectivity were untrue and that the agents “did not, in fact, represent all health insurance licensed in Massachusetts or even all insurers that issued supplemental health insurance in Massachusetts.”

The Court also found that the defendants’ sales agents deceptively passed off separate, supplemental health insurance policies (which provide less-comprehensive coverage than major medical insurance), such as specified disease insurance, as part of or included with major medical insurance in a variety of ways, including providing health insurance quotes that contained a single price, which combined the premiums for major medical insurance and the supplemental health insurance.

On December 31, 2024, the Court issued its Findings of Fact, Rulings of Law and Order for Judgment, following a trial on remedies.

The Court found that the defendants engaged in widespread misrepresentations of supplemental health insurance that they sold in Massachusetts, including intentionally engaging in bundling of major medical and supplemental insurance to deceive consumers into unknowingly buying supplemental polices.

Based on Defendants’ widespread misrepresentations, the Court ordered them to pay back over $50 mn that consumers had paid for those policies.  It also imposed over $115 mn in civil penalties against the defendants for multiple different categories of violations, reflecting “the egregiousness of respective violations.”

The Court also directed further proceedings on an award to the Commonwealth of reasonable costs of investigation and attorney’s fees and further injunctive relief against the defendants.