Health IQ Lawsuits: WARN Act, TCPA, and Bankruptcy Claims

Health IQ, the Mountain View insurance technology startup that collapsed into Chapter 7 bankruptcy in August 2023, has faced four distinct waves of litigation: class actions by laid-off employees under the WARN Act, a telemarketing class action under the Telephone Consumer Protection Act, at least 17 vendor breach-of-contract suits that include fraud allegations against founder Munjal Shah, and adversary proceedings filed in 2025 by the bankruptcy trustee against major corporations including Aetna, Amazon Web Services, and Google. The Health IQ lawsuits sit across federal courts in Florida, Oklahoma, and the Delaware bankruptcy docket, and several remain active in 2026.

WARN Act Class Actions Over the December 2022 Layoffs

In December 2022, Health IQ terminated between 700 and 1,000 employees with no advance notice.¹ Two proposed class actions followed within weeks, both filed in the Middle District of Florida.

Karyssa Quiles filed first, in Case No. 5:22-cv-00669, on December 20, 2022.¹ Jessie Lynn Evans filed a separate class action in the district’s Jacksonville Division, Case No. 3:22-cv-01400.² Both suits alleged that Health IQ violated California’s Worker Adjustment and Retraining Notification Act by failing to give the required 60 days’ advance written notice. The plaintiffs sought the wages and benefits that would have accrued during that notice period.

Neither case shows a final resolution in the available record. Both were likely affected by Health IQ’s Chapter 7 filing eight months later, which triggers an automatic stay on pending litigation.

Telemarketing Class Action Under the TCPA

Maki Tyner sued Health IQ in 2021 in the U.S. District Court for the Western District of Oklahoma, Case No. 5:21-cv-00608. She alleged that the company called her number despite its registration on the Do Not Call list, called without her consent, and kept calling after she asked them to stop, all violations of the Telephone Consumer Protection Act.³

In December 2022, the court denied Health IQ’s motion for summary judgment. The ruling found that the company had not shown Tyner consented to the calls and that its internal compliance procedures did not shield it from liability.³ Health IQ was set to face the class on the merits before the bankruptcy filing months later complicated the case’s path.

Vendor Breach-of-Contract Suits and Fraud Allegations

Health IQ’s bankruptcy filing disclosed 17 pending breach-of-contract lawsuits, most brought by vendors, particularly lead-generation firms, that had kept providing services while going unpaid. The $189.2 million in unsecured liabilities in the Chapter 7 petition was largely attributed to this backlog of vendor claims and litigation.⁴

One vendor, Quote Velocity, was owed nearly $7 million and had already obtained a prejudgment writ of attachment allowing courts to seize some of Health IQ’s assets before the bankruptcy filing.⁴

At least one of the vendor suits went beyond contract claims. According to reporting by Forbes and Yahoo Finance, the suit alleged fraudulent business practices, claiming that Shah had encouraged employees to keep ordering leads from vendors even though he knew the company would struggle to pay for them.⁴ Many of the vendor suits were placed on administrative stay once the Chapter 7 was filed.⁵

The Bankruptcy Case and Trustee Lawsuits

Health IQ, officially Hi.Q, Inc. and also doing business as HealthWealthy, Inc., filed for Chapter 7 on August 30, 2023, in the U.S. Bankruptcy Court for the District of Delaware, Case No. 23-11361.⁶ The petition listed $256.7 million in total liabilities against $1.3 million in assets, including $67.5 million in secured debt and $189.2 million unsecured.⁷ TriplePoint Venture Growth was the largest secured creditor at $50 million.⁴

Don A. Beskrone was appointed Chapter 7 trustee. In August 2025, Beskrone filed a series of adversary proceedings, which are lawsuits brought inside the bankruptcy case, against multiple major corporations. Named defendants include Aetna Life Insurance Company, Amazon Web Services, and Google LLC.⁸ The specific claims and dollar amounts are not detailed in publicly available summaries, though trustee adversary actions of this kind typically seek to recover preferential transfers or fraudulent conveyances made in the period before the bankruptcy filing.

The main case has an unclear status. One court records database marks it as dismissed on November 25, 2025.⁸ Another tracking service shows continued docket activity through May 2026, including court-approved interim compensation for trustee counsel and accountants.⁶ The trustee’s adversary proceedings appear to remain active separately from the main case.

Payments to Munjal Shah During the Collapse

Shah’s compensation during Health IQ’s wind-down drew scrutiny in the reporting that surfaced the fraud allegations. Forbes and Yahoo Finance reported that Shah received a $42,000 vacation-accrual payout five days after the December 2022 mass layoff and began drawing $3,200 biweekly as a “special adviser to the CEO” starting in February 2023. The same month, he reportedly drew more than $170,000 in salary and other compensation while sending an email to investors apologizing for losing their money.⁴

Shah left Health IQ in 2023 and has publicly attributed the collapse to rising interest rates that made the company’s debt unserviceable, saying he “lost huge amounts of money personally.”⁵ No regulatory actions against him personally have been reported.

1
ClassAction.org. Health IQ Failed to Provide Mandatory Notice Prior to December 2022 Layoffs, Class Actions Allege
2
ClassAction.org. Evans v. HI.Q Inc.
3
Bloomberg Law. Health IQ Fails to Bounce Class Lawsuit Over Telemarketing Calls
4
Yahoo Finance. Andreessen Horowitz and Others Poured $200 Million Into Health IQ
5
MedCity News. Hippocratic AI CEO: I’ll Try to Get My Redemption Through Hippocratic
6
Inforuptcy. Bankruptcy Case – HiQ, Inc.
7
Forbes. Andreessen Horowitz-Backed Startup Health IQ Files for Bankruptcy
8
PACER Monitor. HiQ, Inc.