In a settlement for alleged violations of an extended version of the "stay on your parents' plan" policy, New York's attorney general is hoping to "send a message to insurance companies."
After an investigation revealed noncompliance with New York's 2009 Age 29 law, EmblemHealth is offering reinstated coverage to about 8,300 New Yorkers under the age of 30 who were allegedly not notified of their right to purchase continuation coverage through their parents' plans. Emblem, which covers about 3.4 million New Yorkers through plans that include Group Health Inc. and HIP, is expected to pay about $90,000 in previously-denied claims under the settlement.
The office of New York attorney general Eric Schneiderman launched an investigation into Emblem after a complaint from one HIP member who said her adult daughter's inpatient hospital claims were denied because she did not have insurance at the time of the care, shortly after she turned 26. Schneiderman's office found that the member and her daughter had not received a termination notice or a notification of the option, under the 2009 state law, to buy continuation coverage.
The office later learned that some 8,300 Emblem members did not receive the legally-required continuation notice letters between 2010 and 2012, and that about 1,000 members were not informed of their coverage termination. The investigation found that 105 members who didn't not receive the "Age 29" notification had 175 claims denied. In addition to reimbursing those claims, Emblem will pay a $100,000 fine to the office of the attorney general and participate in monitoring and an audit.
"This settlement sends a message to insurance companies that want to do business in New York," Schneiderman said in a media release. "Providing health coverage to New Yorkers also means playing by the rules and following the laws of our State, which are often stronger than federal regulations." About a quarter of New York's uninsured population are made up of young adults -- 20-and 30-somethings navigating jobs that may not come with health benefits and, until recently, with few other options to find affordable coverage.
New York's Age 29 law preceded the Affordable Care Act but extends the federal law's policy requiring commercial insurers to cover their members' adult children until age 26. (Young people whose parents are covered by Medicaid or Medicare, though, don't have that option.) Under New York's law, insurers have to give members written notification of their right to purchase continuation coverage for adult children within 60 days of the termination of the child's coverage or during an annual 30 day enrollment period.