Group Health Inc. (“GHI”), a subsidiary of EmblemHealth, Inc., New York’s largest health insurer, has reached a settlement with New York regulators that requires improved plan disclosures for out-of-network provider benefits to those members who sign up for GHI’s comprehensive benefits plan (“CBP”).
The settlement also requires that GHI establish a $3.5 million consumer assistance fund to provide financial relief to members, most of them New York City employees, and pay $300,000 in penalties to the New York attorney general’s office.
“Because GHI failed to adequately disclose its out-of-network benefits, individuals and families across New York City lost out on millions of dollars in reimbursements. Consumers need to have accurate information in order to make informed decisions when selecting their health plans,” Attorney General Eric T. Schneiderman said. “By improving communications describing the out-of-network benefit, GHI is committing to helping members and prospective members make important decisions concerning their health care coverage and treatment. Health insurance companies owe it to their members to be transparent about the costs members will incur. Those costs, no matter how big or small, must not be unexpected.”
The attorney general said that his office’s Health Care Bureau opened an investigation into GHI in 2013, after receiving numerous consumer complaints. The investigation focused on GHI’s CBP, one of several health plans offered to New York City employees and retirees. Historically, the CBP has been offered at no cost to employees. The CPB also appeals to employees because the plan includes an out-of-network benefit, which allows plan members to seek care from doctors who are not in the plan’s provider network. However, the CPB’s reimbursement rate for out-of-network providers is tied to a 1983 fee schedule that has rarely been updated, and thus rarely covers – or comes close to covering – the amount billed, according to the attorney general’s office.
The settlement requires that GHI make the fee reimbursement schedule accessible and transparent to members and prospective members.