New York’s Department of Financial Services (DFS) has fined insurers $2.7 million because the insurers failed to notify small businesses that they were eligible to buy special insurance coverage for mental illnesses and children with serious emotional disturbances, the DFS announced today.
Oxford was fined $1.3 million, Empire almost $500,000, and HealthNet and MVP more than $200,000 each. All told, 15 insurers were fined for violating notification requirements under Timothy’s Law.
These are the first-ever fines levied under Timothy’s Law, which became effective in 2007.
The law states that insurers must give small employers the option of purchasing the extended mental health benefits when they buy or renew their basic health insurance plans.
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The DFS was alerted to the violations after it got complaints from a number of small businesses. The businesses said they would have purchased the coverage for their employees, but were never advised of that option when they purchased or renewed their basic health insurance plans.
The insurers being fined said the violations were not the result of conscious intentions to evade the requirements of the law. They all agreed to take steps to prevent the recurrence of violations in the future.