Ark. AG files suit against health discount card company‏

Nick Rees Mar. 12, 2010, 3:25pm

Dustin McDaniel (D)

LITTLE ROCK, Ark. (Legal Newsline) - Arkansas Attorney General Dustin McDaniel has filed a lawsuit against a company he alleges claims to offer health insurance but offers instead only a health discount card with limited benefits.

The suit, filed against the Florida-based Consumer Health Benefits Association, alleges that the company markets its health discount card through telemarketing sales calls to Arkansas consumers as a health insurance plan.

The Consumer Health Benefits Association is also alleged to have overstated the benefits available to Arkansas consumers and to have stated that many medical providers accept the card as a discount for services. In actuality, many providers do not have any agreement with CHBA to honor the card.

The company also failed to register to do business before operating in Arkansas as required by state law.

Approximately 1,800 Arkansas consumers have been enrolled in the Consumer Health Benefits Association since 2003. Typically, customers are charged a non-refundable enrollment fee of $119 and a monthly fee of between $119.95 and $149.54 to participate in the discount card program.

Many Arkansas customers, after receiving the company's card in the mail and attempting to use it, canceled the card within one month on enrollment. Approximately 79 percent of Arkansas customers canceled the card within six months of enrollment.

"This discount card does not provide Arkansans with the protections they were promised," McDaniel said. "This company is blatantly taking advantage of consumers who are seeking affordable health insurance."

McDaniel is seeking an injunction against the Consumer Health Benefits Association to stop its deceptive solicitations in Arkansas as well as for restitution for Arkansas consumers who purchased the discount card.

He is also seeking civil penalties under the Deceptive Trade Practices Act and the Health Related Cash Discount Card Act.

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