A federal class-action lawsuit was filed Friday towards Houston-based firm Well being Matching Account Companies (HMA), claiming it took tens of tens of millions of {dollars} from prospects after allegedly breaching its personal contract.
Based on the lawsuit, filed within the Southern District of Texas, HMA features as a pseudo-health financial savings account with none of the normal tax advantages. Usually, a well being financial savings account permits customers to contribute pre-tax cash for use on health-related purchases not coated by medical health insurance. The lawsuit claims that HMA charged customers a month-to-month charge — allegedly greater than the common well being financial savings account — for account administration and a month-to-month post-tax contribution in trade for HMA matching the customers’ contributions.
Nonetheless, HMA is accused of working beneath a enterprise mannequin that’s allegedly solely worthwhile when customers fail to pay their month-to-month charges. Based on the lawsuit, HMA takes possession of the total account quantity if a consumer fails to pay the required charge and month-to-month contributions.
The lawsuit, which seeks $50 million in damages, additionally claims HMA modified the phrases of its contract with prospects to be able to enhance earnings.
“Starting within the fall of 2022, HMA started making a sequence of radical and unforeseeable adjustments to their enterprise mannequin, in the end altering from an easy-to-use debit card service to requiring prospects to leap by way of hoops and personally submit claims for approval, and later requiring unsuspecting medical suppliers to barter funds with HMA similar to an insurance coverage firm,” the court docket submitting claims.
The corporate and its proprietor, Elliott Gorog, declined to remark Friday.
The Higher Enterprise Bureau has given HMA an F ranking and obtained greater than 100 complaints towards the corporate within the final three years. On Jan. 31, the bureau’s board of administrators revoked HMA’s accreditation resulting from failure to stick to the bureau’s necessities.
Based on the bureau, the corporate has did not:
- “Tackle disputes forwarded by BBB shortly and in good religion”
- “Cooperate with BBB in efforts to get rid of the underlying reason behind patterns of buyer complaints”
- “Strategy all enterprise dealings, market transactions and commitments with integrity, good religion and intent to do what is fairly anticipated”
The category-action lawsuit was filed by Alexander Loftus of Loftus & Eisenberg, LTD in Illinois and James Crewse of the Dallas-based Crewse Legislation Agency, PLLC.
Loftus advised Houston Public Media he turned conscious of HMA after a former shopper knowledgeable him about its alleged enterprise practices and directed him to a Fb group of sad HMA prospects.
“About two months in the past, I used to be contacted by an current shopper who was a sufferer of a Ponzi scheme case that I had,” Loftus stated. “Fairly instantly it was clear that this was a uniform downside that she was affected by. … I discovered the Fb group on this after which I discovered the opposite myriad of complaints on-line.”
Based on the lawsuit, HMA would allegedly make partial funds for claims made by its prospects however would nonetheless withdraw the total quantity from their accounts. The lawsuit alleges that after not receiving the total funds, healthcare suppliers would search the total fee from the shopper immediately regardless of the cash already having been taken from their account by HMA.
Since wanting into the accusations towards HMA, Loftus stated he has repeatedly been contacted by former HMA purchasers.
“I am speaking to those individuals and so they’re everywhere in the South. … So, all these southern individuals which were gravely financially injured have been calling me like loopy,” he stated. “I’ve by no means seen this and I used to be in search of one thing prefer it as a result of (well being financial savings accounts), all people has bought that, however I’ve by no means seen something like this.”
HMA’s companies are bought by brokers, in line with the lawsuit, which cites an alleged 2022 Zoom name with brokers through which the corporate’s proprietor, Gorog, stated HMA had 52,000 prospects actively utilizing the companies and paying month-to-month charges.
Loftus stated the HMA case is exclusive.
“It is bizarre as a result of it is not likely insurance coverage, it is not likely an funding, it is someplace between the 2,” he stated. “Numerous that is similar to the work we do with Ponzi schemes and that is what’s interesting to it as a result of I can apply my information from that to this.
“It is exhausting for regulation enforcement as a result of the [Securities and Exchange Commission] is not as a result of it is not an funding, it is not a safety,” Loftus added. “Insurance coverage individuals aren’t as a result of it is not insurance coverage, so it sort of falls by way of the cracks of regulation.”
