EmblemHealth required to offer reinstatement coverage to more than 8,000 young adults and to pay approximately $90,000 in denied claims
After an investigation uncovered widespread violations of New York law requiring health insurers to offer young adults continuation health coverage on their parents' policies, Attorney General Eric T. Schneiderman announced today his office has reached a settlement with EmblemHealth Inc., a health insurance company that provides coverage to 3.4 million New Yorkers, through its Group Health Incorporated and Health Insurance Plan of Greater New York units. The settlement requires EmblemHealth to offer reinstatement of health coverage to more than 8,000 young adults whose coverage was wrongly terminated, and to pay approximately $90,000 in denied claims.
"The people of New York recognize that young adults need affordable, quality health coverage - and that includes having the option to stay on their parents' insurance through their 20s," Schneiderman said. "This settlement sends a message to insurance companies that want to do business in New York: Providing health coverage to New Yorkers also means playing by the rules and following the laws of our state, which are often stronger than federal regulations."
Following a complaint from a HIP member that her adult daughter's health benefits were denied because her coverage had been terminated when she turned 26, Schneiderman's health care bureau conducted an investigation into Emblem's compliance with New York's "Age 29 Law," which requires health insurers to offer continuation health coverage to children of plan members until they turn 30 years old. The federal Affordable Care Act provides that families can keep their children on their family health policy until the child turns 26. New York's law ensures families can continue to cover their children until they turn 30.
The bureau's investigation revealed neither the HIP member nor her daughter received a termination notice from Emblem, and they did receive any notification of their rights, under New York's "Age 29 Law," to continue the daughter's health coverage. Shortly after she turned 26, the daughter received inpatient treatment, but weeks later, Emblem denied coverage, stating she did not have insurance at the time of her hospitalization. As a result, the complainant was forced to pay $1,000 out of pocket for her adult daughter's treatment, and faced additional bills totaling $4,000.
The investigation showed that Emblem failed to send statutorily required letters to more than 8,000 Emblem members between 2010-12. Of these members, almost 1,000 were not even notified their coverage had been terminated.
The investigation further revealed Emblem denied approximately 175 claims from 105 members who did not receive proper "Age 29" notification, totaling approximately $90,000 in unreimbursed medical treatment.
EmblemHealth has agreed to send letters to affected members offering to reinstate coverage, and to reprocess and pay all unpaid claims of members who did not receive proper "Age 29" notification. Based on information provided by Emblem, it is anticipated the company will offer reinstatement to approximately 8,300 members and will pay approximately 175 claims from 105 members, totaling approximately $90,000 in unreimbursed medical treatment.
Due to the nature of their employment and the unsteady economy, young adults often do not receive their own health benefits, and they comprise about one-quarter of New York state's uninsured population. Many young adults have been able to obtain health coverage on their parents' health plans as a result of the federal Affordable Care Act and New York's "Age 29 Law." But without notice of their rights under the "Age 29 Law," the AG's camp said, young adults in New York have faced limited options for health coverage. The health plans now available on NY State of Health, the state's official health plan marketplace, provide young adults with additional options.
New York's "Age 29 Law," enacted in 2009, extends the availability of health insurance coverage to young adults through the age of 29 under their parents' policies. Under the young adult option, insurers must provide: (i) written notification to group members in each certificate of coverage regarding the right to purchase continuation coverage for their adult children within 60 days after termination of the adult child's coverage, within 60 days after qualifying as an adult child, or during an annual 30-day open enrollment period; and (ii) written notice of an upcoming termination date at least 60 days prior to the date the young adult covered under the parent's policy would have coverage terminated due to reaching the maximum age for coverage. N.Y. Ins. Law. §§ 3221(r)(2)(G); 4305(l)(2)(G).
Under the settlement, EmblemHealth will also submit to monitoring and an independent audit, and will pay $100,000 to the OAG as a civil penalty.
The investigation of this matter was conducted by Assistant Attorney General Michael D. Reisman, under the supervision of Health Care Bureau Chief Lisa Landau and Executive Deputy Attorney General for Social Justice Alvin Bragg.