New York State

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James J. Wrynn    Superintendent of Insurance    25 Beaver Street  New York, N.Y. 10004

ISSUED 10/13/2010 FOR IMMEDIATE RELEASE

HEALTH NET PAYS $1.9 MILLION FINE FOR HEALTH INSURANCE VIOLATIONS

Two Health Net companies paid a $1.9 million fine to settle allegations including not providing consumers with the required information on their “explanation of benefit” forms and not paying certain claims on time, New York State Insurance Superintendent James Wrynn announced today.

“Consumers need clear information on how a health insurance claim was handled and what to do if they feel it was wrongly handled,” Wrynn said. “These and other protections, including the right to be paid promptly, are built into our laws to protect consumers and we will enforce them vigorously.”

“Explanation of benefit” forms are the forms consumers get reflecting how a health insurance claim was handled. It should clearly show the service for which a claim was made, how much of a claim was paid and how much is the consumer’s responsibility, reasons for any denied or partially reimbursed claims, and ways to appeal a decision by the health insurer. Health Net of New York, Inc., and Health Net Insurance of New York admitted that their forms violated the law from Oct. 2003 to Sept. 2008.

The companies also admitted to other violations of the Insurance Law, including failing to promptly process some claims and failing to pay interest or incorrectly paying interest on some claims.

The companies told the Department these failures were not the result of any conscious policy to evade the requirements of the Insurance Law.

“While the size of the fines reflects the seriousness of these violations, I am heartened that the companies have acknowledged their mistakes and taken remedial action,” Wrynn said.

Both companies have revised their forms, policies and procedures to ensure full compliance with the Insurance Law, and will provide evidence of full compliance to the Department within 30 days.

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