Some 400 clients in the Seattle, WA, area have filed a class action lawsuit against Nationwide Insurance, alleging unfair and deceptive business practices. The suit, filed on Wednesday, claims that the plaintiffs were sold fixed indemnity plans that capped health coverage at a predetermined amount, as opposed to providing coverage as a percentage of the medical expenses, which can increase if the bills also increase.
The suit also claims that the plans did not comply with laws requiring certain minimum benefits. Lump sum payments or fixed indemnity payment plans usually do not provide nearly enough coverage of medical expenses.
Additionally, the suit says Nationwide "unfairly and deceptively" sold insurance plans to Washington residents without the company having obtained authorization from the state insurance-commissioner's office. Some of the insurance policies were offered via employers, who were likely also unaware of what was going on.