Tens of thousands of consumers still making monthly payments for "practically worthless" health insurance plans purchased from a shuttered Hollywood-based agency will be allowed to cancel those plans, a federal judge has ordered.
Thursday's ruling by U.S. District Judge Darrin P. Gayles marks the latest courtroom defeat in Steven J. Dorfman's fight to prevent the Federal Trade Commission from permanently closing his company, Simple Health Plans LLC, and distributing its remaining assets to victims of what the FTC calls a sophisticated scam.
Dorfman's customers will be contacted within days by the distributor of their plans, Health Insurance Innovations, and given the option to cancel and cease incurring monthly charges. They will not be given refunds for payments made prior to Thursday's ruling.
Simple Health Plans and numerous affiliated companies have been shut down since Oct. 31, when the FTC secured a temporary restraining order and froze its assets.
The FTC is accusing Dorfman of masterminding a scheme to fool uninsured consumers into thinking they were buying comprehensive health insurance that covered preexisting conditions and complied with the Affordable Care Act.
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