A massive $50 million class-action lawsuit against Health Matching Account Services (HMA) has revealed what could be one of the largest consumer protection cases in healthcare savings history. Our investigation shows that HMA faces accusations of unlawfully holding back tens of millions of dollars from their 52,000 customers’ health savings accounts. The Better Business Bureau has given HMA an F rating due to mounting customer complaints and alleged contract violations. More than 100 formal complaints against the company have been filed in just three years. The situation grew worse after HMA eliminated its debit card system in late 2023. This change forced customers to pay medical expenses upfront and deal with a complex reimbursement process that many say has trapped their funds.
Lawsuit Alleges HMA Services Stole Millions from Health Savings Accounts
A Chicago law firm Loftus & Eisenberg has filed a federal class action lawsuit against Health Matching Account Services Inc. (HMA) in Houston court. The lawsuit claims HMA stole funds from Health Savings Account participants. Named Woodbright v. Health Matching Account Services Inc., the legal action alleges the company took tens of millions of dollars from consumers across the country.
Health matching account services lawsuit: The class action seeks $50M in damages
HMA’s troubles began when they changed their rules without warning in late 2022. The company then blocked customers from accessing their money and made it extremely hard to file claims. HMA’s account seizures brought in over $20 million in revenue. The company tried several tactics. They made partial payments but required written waivers. Providers were forced to submit claims directly. Even when customers made partial or no payments, full amounts were taken from their accounts.
52,000 customers potentially affected
A Zoom call with brokers revealed that about 52,000 customers had signed up with HMA. The company’s contract had a troubling rule – customers would lose their entire account balance to HMA Services if they missed monthly contributions. On top of that, many medical providers and primary care physicians refused to work with HMA’s new payment system. Customers felt trapped and kept making monthly deposits because they didn’t want to lose their saved money.
Health Matching Account Services Lawsuit: How HMA Changed Its Business Model to Trap Customers
Health Matching Account Services started making radical changes to its business operations in the fall of 2022. The company made its biggest change on October 12, 2023, when it announced the end of its debit card system.
Company switches from debit cards to complex reimbursement system
HMA’s original service worked as a simple debit card system for medical expenses. The company ended up changing to a complex reimbursement model that made customers pay medical expenses upfront. Medical providers now had to negotiate payments directly with HMA, like in an insurance company’s process. The company made partial payments for customer claims but still took full amounts from their accounts.
Customers lose all funds upon payment default
HMA’s revised model had a dangerous account forfeiture policy. Customers found a critical clause in their contracts after these changes. Missing just one monthly contribution would immediately end their account. Then any remaining balance would go straight to HMA Services. This policy trapped customers financially because they felt forced to keep making monthly deposits to avoid losing their saved money.
Healthcare providers who got partial payments from HMA went after customers to get the rest of their money. This happened even though HMA had already taken the full payment from customer accounts. The situation ended up forcing customers to pay twice – once to HMA and again to their healthcare providers for the same services.
BBB Revokes HMA’s Accreditation After Customer Complaints Mount
Recent actions by the Better Business Bureau (BBB) have exposed Health Matching Account Services’ questionable business practices. The BBB’s board of directors stripped HMA of its accreditation on January 31, 2024.
Over 100 complaints filed in three years
The BBB of Greater Houston and South Texas has tracked more than 100 customer complaints against HMA in just three years. Customers don’t deal very well with denied claims, can’t access their funds, and face problems with the company’s payment systems. Many customers say they have thousands of dollars stuck in their accounts and can’t get their money.
Health matching account services lawsuit: Company fails to address customer disputes
The BBB’s investigation uncovered several problems with HMA’s business conduct. HMA repeatedly failed to handle customer disputes quickly or honestly. The company showed zero interest in fixing the mechanisms behind ongoing customer complaints. The BBB discovered that HMA was nowhere near meeting expected standards of marketplace integrity.
F rating issued by Better Business Bureau
The BBB ended up giving HMA its worst possible rating – an F. This rating reflects the company’s behavior patterns:
- Failure to respond to customer complaints
- Unwillingness to address systemic issues
- Lack of transparency in business practices
This rating hits harder because HMA used to be an accredited business. The flood of unresolved complaints and HMA’s poor handling of customer concerns forced the BBB to take strong action.
Legal Experts Reveal Why HMA’s Model Escaped Regulatory Oversight
Legal experts who scrutinized the Health Matching Account Services case found major gaps in regulatory oversight. These gaps allowed the company’s controversial practices to continue unchecked. Attorney Loftus, who filed the class action lawsuit, explains that HMA’s business model exists in a regulatory blind spot.
Health matching account services lawsuit: Falls between insurance and investment regulations
HMA’s operational structure falls into an undefined space between traditional financial services categories. The company’s model is like in both insurance and investment products, rather than fitting neatly into existing regulatory frameworks. This hybrid nature has created the most important oversight challenges because no single regulatory body has clear jurisdiction over such services.
SEC and insurance regulators face jurisdiction challenges
The Securities and Exchange Commission (SEC) cannot control HMA’s operations since the company’s services do not qualify as securities or traditional investments. State insurance regulators also face similar constraints because HMA’s products do not meet the technical definition of insurance products.
This regulatory vacuum has created several critical oversight gaps:
- The SEC lacks jurisdiction because HMA’s accounts are not classified as investment vehicles
- State insurance commissioners cannot regulate the services as they don’t qualify as insurance products
- Consumer protection agencies struggle with enforcement due to the unique business structure
- Traditional banking regulations do not fully apply to HMA’s account management practices
This case emphasizes a bigger problem in financial services regulation. Much like the challenges in digital health technology oversight, innovative business models can outpace existing regulatory frameworks. The absence of clear regulatory authority has left consumers vulnerable, as shown by the mounting complaints and legal actions against HMA Services.
Conclusion
The case against Health Matching Account Services reveals major flaws in how healthcare savings protect consumers. Their complex reimbursement system has left 52,000 customers in financial limbo. The company earned an F rating from the Better Business Bureau, showing how businesses don’t deal very well with gaps between insurance and investment regulations.
This brings up real concerns about protecting consumers in financial services that offer new products. HMA kept operating despite many complaints, which shows we need better rules now. Legal experts believe this case might lead to new regulations, especially when you have traditional oversight that can’t keep up with modern business models.
The $50 million lawsuit against HMA marks a turning point for healthcare savings account rules. This case reminds us that consumer protection needs to grow with financial innovation to stop companies from using regulatory gaps to hold onto customer money.
