Press Release

July 30, 2020

 

DFS SUPERINTENDENT LINDA A. LACEWELL ANNOUNCES $1.6 MILLION SETTLEMENT WITH STUDENT HEALTH INSURERS

DFS Review Found That CDPHP Universal Benefits Inc. and MVP Health Services Corp. Charged Unapproved Rates to Students Covered Under Blanket Health Insurance Contracts with Higher Education Institutions

CDPHP to Pay Civil Penalty of $800,000 and Reimburse $394,594 to Students;

MVP Health Services to Pay Penalty of $350,000 and Reimburse $88,436 to Students

NEW YORK − Superintendent of Financial Services Linda A. Lacewell today announced that the New York State Department of Financial Services (DFS) has fined CDPHP Universal Benefits Inc. and MVP Health Services Corp. $1.6 million for charging unapproved rates in the student health insurance market. Under consent orders with DFS, CDPHP will pay a civil penalty of $800,000, and MVP Health Services will pay $350,000 in penalties. CDPHP also will reimburse students who were overcharged premiums a total of $394,594 and MVP will make $88,436 in reimbursements.

“Insurers are required to follow New York law and charge premium rates that have been approved by the Department,” said Superintendent Lacewell. “These consent orders protect the integrity of the New York insurance market, and ensure that consumers − in this case students, who are already struggling with the cost of education and the burden of student loans − do not overpay for health insurance. DFS will continue to foster a level playing field for the market and step up for students.”

As part of its annual review of student health insurers in the New York market, DFS found that both insurers charged unapproved premium rates to students covered under blanket health insurance contracts with institutions of higher learning.

For the 2018-2019 academic year, CDPHP violated Insurance Law § 4308(b) by entering into agreements with 15 institutions of higher education using premium rates that deviated from the approved methodology and included premium rating factors not on file with the Department. In addition, in using unapproved premium rates, CDPHP may have gained an unfair competitive advantage in the student blanket health insurance market in New York.

As a result of its actions, CDPHP charged an unapproved premium rate to students covered under the student blanket health insurance contracts.  CDPHP overcharged 4,525 students at seven institutions a total of $394,594. Under today’s agreement, the company will reimburse that amount to the affected students.

Similarly, for the 2018-2019 academic year, MVP violated Insurance Law § 4308(b) by entering into agreements with two institutions of higher education using premium rates that deviated from the approved methodology and included premium rating factors not on file with the Department. In addition, in using unapproved premium rates, MVP may have gained an unfair competitive advantage in the student blanket health insurance market in New York.

As a result of its actions, MVP charged an unapproved premium rate to students covered under the student blanket health insurance contracts.  MVP overcharged 365 students at one institution a total of $88,426. Under today’s agreement, the company will reimburse that amount to the affected students.

Copies of the CDPHP Universal Benefits Inc. consent order and MVP Health Services Corp. consent order can be found on the DFS website.

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