State reaches settlement with health insurer

After an investigation uncovered widespread violations of New York law requiring health insurers to offer young adults continuation health coverage on their parents’ policies, the state has reached a settlement with EmblemHealth Inc.

EmblemHealth is 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 re-instatement of health coverage to more than 8,000 young adults whose coverage was wrongly terminated and to pay approximately $90,000 in denied claims, Attorney General Eric T. Schneiderman said Wednesday.

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 that families can continue to cover their children until they turn 30.

The investigation showed that Emblem failed to send statutorily required letters to more than 8,000 Emblem members between 2010 and 2012. Of these members, almost 1,000 were not even notified that their coverage had been terminated.

The investigation further revealed that 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.