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Settlement with EmblemHealth for failing to offer continuation coverage to young adults  

NEW YORK - After an investigation uncovered widespread violations of New York law requiring health insurers to offer young adults continuation health coverage on their parents’ policies, Attorney General Eric Schneiderman announced today that his office has reached a settlement with EmblemHealth, Inc. (“Emblem”), a health insurance company that provides coverage to 3.4 million New Yorkers, through its Group Health Incorporated (“GHI”) and Health Insurance Plan of Greater New York (“HIP”) units. The settlement requires EmblemHealth to offer reinstatement of health coverage to more than 8,000 young adults whose coverage was wrongly terminated, and to pay approximately $90,000 in denied claims.

“The people of New York recognize that young adults need affordable, quality health coverage—and that includes having the option to stay on their parents’ insurance through their 20s,” said Schneiderman. “This settlement sends a message to insurance companies that want to do business in New York: Providing health coverage to New Yorkers also means playing by the rules and following the laws of our State, which are often stronger than federal regulations.”

Following a complaint from a HIP member that her adult daughter’s health benefits were denied because her coverage had been terminated when she turned 26, Attorney General Schneiderman’s Health Care Bureau conducted an investigation into Emblem’s compliance with New York’s Age 29 Law, which requires health insurers to offer continuation health coverage to children of plan members until they turn 30 years old. The federal Affordable Care Act provides that families can keep their children on their family health policy until the child turns 26. New York’s law ensures that families can continue to cover their children until they turn 30.

The bureau’s investigation revealed that neither the HIP member nor her daughter received a termination notice from Emblem, and they did not receive any notification of their rights, under New York’s Age 29 Law, to continue the daughter’s health coverage. Shortly after she turned 26, the daughter received inpatient treatment, but weeks later, Emblem denied coverage, stating that she did not have insurance at the time of her hospitalization. As a result, the complainant was forced to pay $1,000 out of pocket for her adult daughter’s treatment and faced additional bills totaling $4,000.

The investigation showed that Emblem failed to send statutorily required letters to more than 8,000 Emblem members between 2010 and 2012. Of these members, almost 1,000 were not even notified that their coverage had been terminated.

The investigation further revealed that Emblem denied approximately 175 claims from 105 members who did not receive proper Age 29 notification, totaling approximately $90,000 in unreimbursed medical treatment. 

EmblemHealth has agreed to send letters to affected members offering to reinstate coverage, and to reprocess and pay all unpaid claims of members who did not receive proper Age 29 notification. Based on information provided by Emblem, it is anticipated that Emblem will offer reinstatement to approximately 8,300 members and will pay approximately 175 claims from 105 members, totaling approximately $90,000 in unreimbursed medical treatment.