Insurance Company to Pay $2.8 Million to Resolve Claims of Unlawful, Deceptive Sales of Health Insurance Sold Across State Lines
Settlement will Provide $2.3 Million to Customers in Massachusetts; Company Allegedly Failed to Cover Basic Health Care Services Required by Law
BOSTON – A Kansas-based insurance company has agreed to pay more than $2.8 million to settle allegations that it used deceptive and unlawful practices to sell health insurance to Massachusetts consumers, Attorney General Maura Healey announced today. The settlement will provide more than $2.3 million to consumers.
According to the complaint, filed Monday along with the consent judgment in Suffolk Superior Court, Unified Life Insurance Company (ULIC) sold health insurance to Massachusetts consumers that was not authorized for sale and engaged in a host of deceptive practices, such as claiming its insurance included services that it did not cover. According to the AG’s complaint, ULIC also excluded Massachusetts consumers from coverage based upon their health status or preexisting conditions, and failed to cover basic health services – such as behavioral health services, maternity services, preventive services for women and children, and other essential benefits required by Massachusetts law. The coverage at issue was sold across state lines and was issued through a third-party association.
“This company sold sub-par health insurance that violated state law,” said AG Healey. “Recently revived federal proposals to take away our state’s longstanding authority to oversee sales of health insurance will leave consumers and families more vulnerable to exploitation and create a ‘race-to-the-bottom’ that will raise prices and reduce access to quality health care for those in need.”
“Consumers deserve to shop for health insurance free from unfair and deceptive sales tactics,” said Donald M. Berwick, President Emeritus of the Institute for Healthcare Improvement and former Administrator of the Centers for Medicare and Medicaid Services. “I applaud our Attorney General for protecting a level playing field in Massachusetts, where insurers compete on providing better health care, not on discriminating against those with preexisting conditions. Our state has a strong history of setting basic standards for health insurance that its residents can depend on.”
State law also requires that health benefit plans sold to individuals or small groups in Massachusetts be filed with the Massachusetts Division of Insurance (DOI) and approved by the Commissioner of Insurance. According to the AG’s complaint, ULIC did not file with DOI or get approval from the Commissioner.
Under the terms of the consent judgment, approved by the Court on Monday, ULIC must pay more than $2.8 million, including $2,348,000 for consumer relief, which will be distributed by ULIC, and $465,000 to the Commonwealth, including $450,000 in civil penalties.
The AG’s Office has brought multiple actions raising similar issues against health plans, often ones sold across state lines and involving association health insurance.
Consumers concerned about illegal health insurance practices in Massachusetts are urged to call the AG’s Health Care Helpline at (888) 830-6277. Guidance on how to choose a health plan is also available on the AG’s website.
This matter was handled by Assistant Attorney General Emiliano Mazlen, with assistance from Division Chief Karen Tseng and Mediator/Policy Analyst Patricia Hamilton, of AG Healey’s Health Care Division and Anthony Crespi of AG Healey’s Civil Investigations Division.