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Washington State Fines Carrier Over Benefit Maximum Omission

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Regulators are punishing a managed care company for leaving key dental plan information out of materials sent to plan members.

The Washington state Office of the Insurance Commissioner says it has imposed a $100,000 fine on Kaiser Permanente Health Alternatives, Portland, Ore., for selling dental coverage to 567 Washington state residents without explaining that the plan had a $1,000 yearly maximum benefit.

Washington regulators have suspended $50,000 of the fine because Kaiser dealt with the consequences of the omission by spending more than $50,000 to reimburse 188 members of the dental plan who exceeded the $1,000 dental claims limit.

Insurance Commissioner Mike Kreidler suspended half of the fine against Kaiser Permanente Health Alternatives after the company agreed to reimburse 188 dental plan members more than $50,000 for dental services that would have been covered if there had been no benefit maximum.

Kaiser, an affiliate of Kaiser Permanente, Oakland, Calif., filed the $1,000 limit with Washington state regulators only from 2001 to 2004, and not for 2005 or 2006, officials say.

Kaiser failed to tell dental plan members about the limit in service agreements sent to dental plan members from 2001 to 2006, officials say.

A spokeswoman for Kaiser notes that the company discovered the omission itself and reported the omission to state regulators.