Mid-Atlantic regulators say a carrier gave 2,123 small businesses too little information when it led them to stick with health plans with reduced benefits.
The New Jersey Department of Banking and Insurance has filed an administrative order alleging that CIGNA HealthCare of New Jersey and an affiliate, Connecticut General Life Insurance Company, both units of CIGNA Corp., Philadelphia, failed to warn the employers that it was dropping 35 optional benefit riders used with the standard health maintenance organization plan from their coverage.
One change limits coverage of home health services to 60 days per year, and another limits coverage of durable medical equipment to $1,000 per year, officials say.
The state-mandated HMO plan does not limit home health services or durable medical equipment coverage, officials say.
When CIGNA applied to the New Jersey department for permission to drop the riders, it said it would include a notice about non-renewal of the riders, but it failed to notify the employers that it was dropping the riders, officials say.
New Jersey Insurance Commissioner Steven Goldman has signed an order calling for CIGNA and Connecticut General to restore coverage and benefits to “the degree they would have existed had employers been properly advised of options and plan choices,” and to pay $2.1 million in fines, officials say.
CIGNA and Connecticut General have 30 days to request an administrative hearing objecting to the order.
Representatives for CIGNA were not immediately available to comment on the order.