New York Regulators Fine Cigna $2 Million Over Stop-Loss Sales

The New York department states in its order that, from Jan. 1, 2016, through Jan. 1, 2017, Cigna violated issued 43 fully insured health insurance policies and 38 stop-loss insurance policies outside the state to evade state small group community-rating rules.

Cigna Health and Life is a New York-based subsidiary of Bloomfield, Connecticut-based Cigna Corp.

In an emailed statement, a Cigna spokesman said, “Our objective is to improve the health and health care affordability in the communities we serve. We have agreed with the New York Department of Financial Services to resolve this matter and would welcome the opportunity to work with the department and insurers in developing industry guidance regarding the scope of New York’s small group law in order to ensure a level, competitive playing field.”

The investigation by the New York department began after the department received complaints in July 2016 about Cigna selling stop-loss and fully insured health insurance policies outside of the state to New York-based small employer groups.

In the consent order, which was signed by Cigna Health and Life’s president, Julia Huggins, the department says the insurer initially agreed to stop selling of stop-loss insurance and fully insured health insurance policies outside New York, but “later resumed its practices.”

As part of the agreement, the insurance company must provide written notices to all small groups that were issued coverage through prohibited transactions by Dec. 1. Cigna must also provide the state agency with a list of the names and addresses of all small-group policyholders to whom the written notices were sent.

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