The state Attorney General’s office sued the cost-sharing group Health Innovations on Friday, accusing it of deceiving consumers into thinking it was affiliated with a different company that was providing real health insurance when in fact it was not.
The lawsuit also says that the company, which is based in White Plains, has misrepresented itself to various state officials and politicians, as well as to investors.
Health Innovations is one of a number of so-called “exchange groups” that set up self-service kiosks at shopping malls in places like Starbucks to provide affordable, low-cost health insurance plans.
But it only has a “self-service center” license to operate in New York, the Attorney General’s office says, and it is not regulated by the state insurance department. The state is suing for what it calls deceptive trade practices.
Health Innovations bought a nonprofit company called Vibrant Health that was giving discounts on health care to people who qualified, the AG’s office said.
When Healthcare.gov opened up in 2012, Vibrant Health posted an offer to “participate in the American dream” at a Health Innovations kiosk. “Just simply walk through the glass doors and enjoy Vibrant Health’s premium group health plans and Healthcare.gov enrollment services,” the website said.
The lawsuit says that the website was not an affiliate of Health Innovations, but instead provided a link to Healthcare.gov.
“Health Innovations encouraged New Yorkers to use the Health Innovations website to acquire health insurance instead of the highly regulated exchange programs offered by the Department of Financial Services,” the lawsuit says.
The suit says that Health Innovations misled prospective customers into thinking they could get discounts by using the Vibrant Health website. It also says that Health Innovations suggested discounts of up to 40 percent, which are not available through Healthcare.gov, and had claims on Health Innovations’ website.
Health Innovations had no immediate comment.
Health Innovations was started in the 1960s by Joseph Braunstein, a journalist whose main experience was running a chain of Broadway theaters. Mr. Braunstein, who died in the 1980s, created an insurance company in the 1960s that offered policies in areas that had no insurers. He has been involved in a number of other insurance companies and spent time as a consultant to President George W. Bush.