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Press Release

January 17, 2013

Contact: Ron Klug, 518-474-4567


DFS Finds Violations Including Failing to Provide Complete Explanations of Benefits Statements in Approximately 164,000 Cases

Benjamin M. Lawsky, Superintendent of Financial Services, today announced that HealthNow New York Inc. has been fined $700,000 for failing to explain coverage and benefit rights to certain health plan members. HealthNow also failed to tell members how to appeal claims denials.

HealthNow, a Buffalo based not-for-profit insurer, was cited for approximately 164,000 instances of failing to provide what are known as explanation of benefits statements that contained all the necessary wording. The statements, required under state law, are intended to describe what services the plans cover and how consumers can appeal when they believe claims are improperly denied.

In addition, the company was cited for failing to: file certificates of appointment for its agents; timely notices of appointment of agents; notify the Department of the company’s termination of agents; and ensure that commissions were paid only to licensed producers.

Further, HealthNow failed to provide to its members written acknowledgement of grievances within fifteen business days, as required by law.

“Consumers have a right to know what their health plans cover, what the plans don’t cover, and what they can do when their claims have been denied improperly,” Superintendent Lawsky said. “This fine reflects the serious and systematic nature of the practices uncovered by the Department. We are however, encouraged by Healthnow’s commitment to addressing the Department’s findings and improving its performance going forward.”

The violations found in the DFS exam include:

  • Failing to send explanation of benefits statements that contained all the wording required by law for certain claims which were denied in part or in full. This included instances when the explanation of benefits statements failed to contain proper appeal rights.
  • Failing to file certificates of appointment for its insurance agents.
  • Failing to file notices of appointment of producers with the superintendent within fifteen days from the date that the agency contract was executed or the first insurance application was submitted.
  • Failing to notify the Department of its insurance agents’ terminations.
  • Failing to ensure that commissions were paid only to licensed producers.

HealthNow was also cited for failing to provide written acknowledgement of grievances within 15 business days.

In a settlement with the Department, HealthNow agreed to take steps necessary to prevent the violations from occurring again. The company agreed to revise procedures regarding issuing explanation of benefits statements and making mandated filings regarding its producers.

The stipulation signed by HealthNow can be found on the Department’s website,

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