Houston-based Health Matching Account Services (HMA) is facing a federal class-action lawsuit, accusing the company of misappropriating millions of dollars from its customers. The lawsuit, filed on Friday in the Southern District of Texas, alleges that HMA breached its contract with account holders and operated a deceptive business model that financially harmed numerous individuals.
The core of the lawsuit revolves around HMA’s service, which is presented as an alternative to traditional health savings accounts (HSAs). Unlike genuine HSAs that offer pre-tax benefits for health-related expenses, HMA accounts allegedly lack these tax advantages. The lawsuit claims that HMA lured customers with promises of matching contributions, charging a monthly management fee, purportedly higher than standard HSA fees, along with a monthly post-tax contribution from the user. In return, HMA was supposed to match these consumer contributions, creating a fund for healthcare expenses.
However, the lawsuit paints a starkly different picture of HMA’s operations. It asserts that HMA’s business model was designed to profit when customers faltered on their monthly payments. The legal filing details that if a user failed to meet the required monthly fee and contribution, HMA would seize complete ownership of the entire account balance. This clause, according to the lawsuit, became a key point of contention and a source of significant financial loss for HMA customers.
A gavel resting on a dark surface, symbolizing legal proceedings.
The class-action lawsuit is seeking substantial damages, aiming for $50 million to compensate affected customers. Furthermore, the legal action accuses HMA of unilaterally altering contract terms to boost its profitability, allegedly to the detriment of its users. The lawsuit claims these changes began in the fall of 2022, fundamentally shifting the nature of HMA’s service.
According to the court documents, HMA transitioned from a user-friendly debit card system to a cumbersome claims process. Customers were allegedly forced to navigate complex procedures and personally submit claims for approval. The lawsuit further alleges that HMA began requiring healthcare providers to negotiate payments, essentially functioning as an insurance company without explicitly being one. This shift reportedly caught both customers and medical providers off guard, leading to confusion and financial strain.
HMA and its owner, Elliott Gorog, have declined to comment on the pending litigation.
Adding to HMA’s woes, the Better Business Bureau (BBB) has given the company a failing grade, assigning an “F” rating. Over the past three years, the BBB has reportedly received over 100 complaints against Health Matching Account Services. This culminated in the BBB’s board of directors revoking HMA’s accreditation on January 31st, citing the company’s failure to meet BBB standards.
The BBB outlined several key reasons for the revocation, stating that HMA failed to:
- “Address disputes forwarded by BBB quickly and in good faith.”
- “Cooperate with BBB in efforts to eliminate the underlying cause of patterns of customer complaints.”
- “Approach all business dealings, marketplace transactions and commitments with integrity, good faith and intent to do what is reasonably expected.”
The class-action lawsuit is being pursued by attorneys Alexander Loftus of Loftus & Eisenberg, LTD in Illinois, and James Crewse of the Crewse Law Firm, PLLC, based in Dallas.
Loftus explained to Houston Public Media that his involvement began when a former client, already familiar with his work on a Ponzi scheme case, alerted him to HMA’s alleged practices and directed him to a Facebook group of dissatisfied HMA customers.
“About two months ago, I was contacted by an existing client… Pretty immediately it was clear that this was a uniform problem,” Loftus stated. His subsequent discovery of the Facebook group and numerous online complaints solidified his concerns and prompted legal action.
The lawsuit further details a troubling pattern of alleged partial payments by HMA. Customers reported that while HMA withdrew the full claim amount from their accounts, healthcare providers often received only partial payments. This practice allegedly left customers responsible for the remaining balance, even though the funds had already been debited by HMA. This situation created a double financial burden for many users and damaged their relationships with healthcare providers.
Since initiating his investigation, Loftus reports a significant influx of contact from former HMA clients. “I’m talking to these people and they’re all over the South… all these southern people that have been gravely financially injured have been calling me like crazy,” he emphasized. He expressed surprise at the unique nature of HMA’s service, noting, “I have never seen this and I was looking for something like it because (health savings accounts), everybody has got that, but I’ve never seen anything like this.”
The lawsuit highlights that HMA’s services are marketed through brokers. Referencing an alleged 2022 Zoom call with brokers, the lawsuit states that HMA owner Gorog claimed the company had 52,000 active customers paying monthly fees.
Loftus characterized the HMA case as unusual, stating, “It’s weird because it’s not really insurance, it’s not really an investment, it’s somewhere between the two.” He drew parallels to his experience with Ponzi schemes, finding the case appealing due to the overlapping legal principles. He also pointed out the regulatory challenges, explaining, “It’s hard for law enforcement because the [Securities and Exchange Commission] isn’t interested because it’s not an investment, it’s not a security… Insurance people aren’t interested because it’s not insurance, so it kind of falls through the cracks of regulation.”
Full lawsuit document
