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Superintendent of Insurance Howard Mills today announced that the New York State Insurance Department and Vytra Health Plans Long Island, Inc. (Vytra), a Melville, NY-based health maintenance organization (HMO), have reached an agreement whereby Vytra will offer $2.1 million in rate credits and/or refunds to certain policyholders and pay a $300,000 fine for violating a number of consumer protection laws.

"The agreement we’ve reached with Vytra will ensure that policyholders who were charged higher premiums than they otherwise should have been paying receive either rate credits or refunds," Superintendent Mills stated. "Vytra is also implementing a remedial action plan that will bring the company into compliance with New York’s landmark HMO consumer protection measures."

The Insurance Department determined during a market conduct examination that between January 2003 and June 2005 Vytra did not follow its own Department-approved experience rating formula. These formulae are created by HMOs and form the basis for the premiums charged to experience related group policyholders, who are comprised of companies with more than 50 employees. Most policyholders affected by the agreement are in the 50-200 employee range.

Vytra was purchased in 2001 by the Health Insurance Plan of Greater New York (HIP) but Vytra has functioned over the past five years as an independent company. Vytra is merging its operations into HIP’s in 2006 and policyholders who are eligible for rate credits or refunds will learn the details about what compensation they are entitled to under the Insurance Department accord when their group policy comes up for renewal.

In a related development, Vytra has also agreed to allocate $700,000 in rate relief to its direct pay individual policyholders, all of whom will be moving to HIP contracts in 2006. These monies are separate and apart from the $2.1 million in rate credits and/or refunds being offered to group policyholders.

Moreover, Vytra has as part of this same agreement with the Insurance Department also agreed to adhere to the state’s prompt payment guidelines, enhance the clarity of its written benefit statements for consumers, and improve its accounting for the payment of commissions to agents and brokers.

Vytra’s operational improvements will be monitored by the Insurance Department during its transition into HIP.


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