Insurer Agrees To Pay 200,000 Dollars In Restitution; Pay Claims After Terminating Coverage After Employers Failed To Pay Premiums

Main Category: Health Insurance / Medical Insurance
Article Date: 28 Jul 2007 - 1:00 PDT

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Attorney General Martha Coakley filed an assurance of discontinuance in Suffolk Superior Court in connection with ConnectiCare Insurance Company, Inc.'s termination of health insurance policies of employees whose employers failed to pay their premiums. ConnectiCare, a Connecticut-based health insurer that has 5,678 Massachusetts members, violated state law by failing to provide 202 groups with notice that their employers' group health plan was terminated due to the non-payment of premiums by their employers.

"It is unacceptable for an insurance provider to discontinue employees' health insurance coverage without notifying them," said Attorney General Martha Coakley. "Through no fault of their own, these employees had no way of knowing that their employers had failed to send the premiums that had been withheld from their paychecks to ConnectiCare."

Under the terms of the settlement, ConnectiCare will pay approximately $200,000 in restitution to affected consumers and $30,000 to the state. ConnectiCare will also send corrective notices to subscribers and give affected subscribers an opportunity to submit previously un-filed claims that occurred during the time period. Additionally, ConnectiCare agreed to reform its policies going forward and notify subscribers when a policy is terminated due to an employer's failure to pay premiums.

Under a regulation issued by the Attorney General's Office, insurers must notify employees in writing that their employers have failed to pay for their health insurance before cutting them off.

This matter was handled by Assistant Attorney General Danielle Wood and Division Chief Quentin Palfrey of Attorney General Martha Coakley's Health Care Division.

http://www.ago.state.ma.us

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