The New York State Department of Financial Services (DFS) fined several health insurers operating in New York for not informing small businesses they could buy coverage for mental illnesses and children with emotional disturbances.
DFS levied a total of $2.7 million in fines against the insurers, some of which operate in Central New York. Minneapolis–based UnitedHealth Group’s UnitedHealthcare and Oxford arms were fined a total of $1.3 million. DFS fined Schenectady–based MVP Health Care more than $215,000.
Other fines included more than $480,000 for New York City–based Empire BlueCross BlueShield, more than $260,000 for Woodland Hills, Calif.–based Health Net, Inc., more than $187,000 for New York City–based EmblemHealth’s Health Insurance Plan of Greater New York and HIP Insurance Co. of New York, more than $112,000 for Williamsville–based Independent Health, and more than $101,000 for Buffalo–based HealthNow New York, Inc.
The fines came after the insurers violated notification requirements under a state regulation known as Timothy’s Law, according to DFS. The law requires insurers to notify small employers with fewer than 50 employees that they can purchase extended mental-health benefits when they buy or renew basic health-insurance plans.
“Mental illness can have devastating consequences for families,” DFS Superintendant Benjamin Lawsky said in a news release. “It’s essential that people understand that insurance benefits are available for treating mental illnesses and that businesses know this option is available.”
DFS responded to complaints from small businesses and found that the violations occurred in 2009 and 2010, it said. The insurers being fined agreed to try to prevent future violations and said the infractions were not intentional, according to the department.
“We are committed to ensuring that employers and their employees understand the benefits that may be available to them,” UnitedHealthcare spokeswoman Maria Gordon-Shydlo said in a statement. “Since 2007, UnitedHealthcare has provided information about benefits covered under Timothy’s Law to its brokers, employer groups, and other policy holders. The Department of Financial Services notified us in 2010 that we needed to further enhance our communications, and we have since updated our enrollment packages based on its feedback.”
MVP Health Care has also worked to comply with the law, according to a statement from spokesman Michael Traphagan.
“MVP Health Care has always made this coverage available, and once we discovered a communication issue existed, we immediately took steps to fix the communications,” he said. “And, we continue to make the coverage available to our customers.”
Contact Seltzer at rseltzer@cnybj.com