Health Net Agrees to Settle Rescission Cases

0

Health Net Inc. has reached a $25 million agreement with the California Department of Insurance to offer new coverage to 926 people whose policies it rescinded after they got sick.

The Woodland Hills-based insurer said it would reimburse up to $14.2 million in outstanding medical expenses and waive up to $7.2 million in insurance premiums. The company will also pay the department a $3.6 million fine.

The settlement covers rescissions that have occurred since 2004. The department was scheduled to release details about the settlement at a Friday morning event at Providence St. Joseph Medical Center in Burbank.

Health Net previously contended that policies were cancelled because policyholders failed to properly disclose pre-existing conditions. But the company has since announced that it would no longer cancel policies without first seeking approval from a binding third-party review.

The California Department of Managed Health Care in November fined Health Net Inc. $1 million for failing to disclose a link between employee bonuses and the cancellation of individual insurance policies. A Los Angeles arbitration judge in February ordered the insurer to pay $9 million to a breast cancer patient whose coverage had been rescinded.

Similar actions have been taken against Blue Cross of California and Kaiser Permanente.

HealthNet shares were up 22 cents, or 1 percent, to $26.27 in morning trading on the New York Stock Exchange.

No posts to display