DFS Fines Excellus Health Plan $1 Million for Illegally Denying Consumers Contraceptive Coverage and Other Violations of New York Insurance Law

ALBANY, N.Y., April 17 -- The New York State Department of Financial Services issued the following news release:

Financial Services Superintendent Maria T. Vullo announced today that Excellus Health Plans, Inc. has been fined $1 million by the Department of Financial Services (DFS) for violations of New York Insurance Law. A DFS investigation found that the insurer wrongly denied contraceptive coverage due to internal system and process errors, failed to promptly pay or deny claims, and failed to acknowledge or resolve consumer grievances within time frames required by law.

Under New York law, health plans in New York are required to provide coverage for all contraceptive drugs and devices and all non-grandfathered health plans must cover at least one form of contraception in each of the FDA-approved contraceptive delivery methods without co-pays, coinsurance or deductibles. DFS recently issued a report (http://www.dfs.ny.gov/reportpub/contraceptive_coverage_rpt_022017.pdf) describing an undercover sting investigation that discovered that certain New York health insurers are providing consumers with incorrect information about contraceptive coverage. DFS also issued a circular letter (http://www.dfs.ny.gov/insurance/circltr/2017/cl2017_s1_cl01_2003.pdf), which was announced by Governor Cuomo on January 21, 2017, ensuring that all New York health insurers are providing full contraceptive coverage as required by law.

"DFS is taking this action to ensure that women receive the reproductive healthcare benefits they are entitled to under New York law," said Financial Services Superintendent Maria T. Vullo. "Health insurers cannot deny New Yorkers of their State-mandated contraceptive coverage for any reason. In addition, consumers are entitled to prompt payment of claims and responses from their health insurers, as required by New York Insurance Law."

A market conduct examination by DFS found that between 2008 and 2013, Excellus erroneously denied 1,000 claims for contraceptive coverage due to an error in coding. DFS is currently investigating whether insurers are complying with New York's contraceptive coverage laws, following an undercover sting that found many insurers were giving inaccurate information to consumers. Under New York State Insurance Law, contraceptive coverage must be provided with no copayments, deductibles or any out-of-pocket costs, and insureds must be provided accurate information about their rights to this coverage.

The DFS investigation also found that Excellus did not make prompt payment of certain healthcare claims, payment of interest on some claims and failed to deny some claims on a timely basis. Excellus also failed to acknowledge grievances by 482 insureds within 15 business days and failed to resolve 339 grievances within the 30-day period mandated by New York Insurance Law.

Under the consent order, Excellus has agreed to take all steps necessary to correct all violations and to comply with New York State Insurance Law and Regulations in the future.

A copy of the consent order between Excellus and DFS can be found here (http://www.dfs.ny.gov/about/ea/ea170417.pdf).