[NYAPRS Enews] IFA: NY Fines 15 Insurers $2.7 Million For Violating Timothy's Law

Wed May 9 08:00:11 EDT 2012

NYAPRS Note: The first-ever enforcement of Timothy's Law sends a strong
message to health insurers over the provision of mental health coverage
in New York. We're very grateful to the NY Department of Financial
Services for their strong action here.

New York Fines 15 Insurers $2.7 Million For Violating Timothy's Law
<http://ifawebnews.com/2012/05/08/new-york-fines-15-insurers-2-7-million
-for-violating-timothys-law/> 

By Bob Graham  IFAnews.com May 8, 2012

New York insurance regulators fined 15 insurers a total of $2.7 million
for failing to notify small businesses of their eligibility to buy
special coverage.

The insurers who failed to comply with the provisions of Timothy's Law
are the first to be fined since the law's enactment in 2007, according
to Benjamin M. Lawsky, superintendent of the New York Department of
Financial Services.

The law requires insurers tell small businesses the option of purchasing
extended mental health benefits when they buy or renew their basic
health insurance plans.

The fines imposed include:

*	Oxford/United, $1.31 million
*	Empire Health Choice, $480,440
*	HealthNet, $260,680
*	MVP, $215,630
*	HIP, $187,570
*	Independent Health, $112,350
*	HealthNow, $101,640

The violations occurred during calendar 2009 and 2010, officials said,
noting that additional insurers were polled and found not to have
violated the law.

The companies were found not to have willfully evaded the law. They also
agreed to correct the problems leading to the violations, Lawsky said.

The violations were uncovered when the department began investigating
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.

"Mental illness can have devastating consequences for families," Lawsky
said in a statement. "It's essential that people understand that
insurance benefits are available for treating mental illnesses and that
businesses know this option is available."

Under Timothy's Law, insurance plans - for both large-employer groups
and those with fewer than 50 employees - are required to provide 30 days
of inpatient treatment and 20 days of outpatient visits for mental
health treatment.

Large group plans with more than 50 employees are mandated to provide
coverage for treating biologically based mental illnesses and children
with serious emotional disturbances at a level that is comparable to
coverage for non-mental health conditions.

The law requires insurers to offer small groups the option of buying
this level of comparable coverage as an extended benefit. Small groups
are those with fewer than 50 employees.

Timothy's Law is named for Timothy O'Clair, a 12-year-old boy from
Schenectady County who took his own life in 2001 when his family was
unable to obtain adequate mental health treatment needed for their son.

The department's investigation found that the violations occurred during
calendar years 2009 and 2010. In addition to the insurers fined,
Department examiners also polled additional insurance companies, but
those companies were not found to have failed to provide the required
written notifications.

Shelly Nortz, steering committee member for the Timothy's Law Campaign
and deputy executive director of the Coalition for the Homeless, said
the group was "pleased" that its concerns about insurers complying were
taken seriously.

The companies within the larger health plans that were fined include:
Empire HealthChoice Assurance, Empire HealthChoice HMO, HealthNet
Insurance Company of NY, HealthNet of NY, HealthNow New York, HIP
Insurance Co., HIP of Greater New York, Independent Health Association,
Independent Health Benefits Corp., MVP Health Insurance Co., MVP Health
Plan, Oxford Health Insurance, Oxford Health Plan Preferred Care (RAHMO)
and United HealthCare Insurance Company of NY.

http://ifawebnews.com/2012/05/08/new-york-fines-15-insurers-2-7-million-
for-violating-timothys-law/

==============

Timothy's Law Fines Total $2.7M

Officials Say 15 Insurers Didn't Give Notice About Mental Health
Coverage

By Rick Karlin  May 8, 2012

ALBANY - Fifteen health insurance providers statewide have been fined a
total of $2.7 million for failing to properly notify small business
owners of their rights under Timothy's Law.

Named for Timothy O'Clair
<http://www.timesunion.com/?controllerName=search&action=search&channel=
local&search=1&inlineLink=1&query=%22Timothy+O%27Clair%22> , a
12-year-old Schenectady County boy who killed himself in 2001 after his
family exhausted coverage options for his mental health disorders, the
law mandates that insurers offer the same coverage for mental illnesses
as for physical ailments.

As it was being developed, small business owners argued that the 2007
measure would be too costly. As a result, companies with 50 employees or
less were exempted from the mandate.

However, these small employers can opt to buy mental health coverage for
an extra fee and insurance companies have to make it available to them.

All of the affected insurance companies offered the coverage to small
employers, but they had failed to properly notify customers that such
coverage was available.

"Mental illness can have devastating consequences for families. It's
essential that people understand that insurance benefits are available
for treating mental illnesses and that businesses know this option is
available," Department of Financial Services
<http://www.timesunion.com/?controllerName=search&action=search&channel=
local&search=1&inlineLink=1&query=%22Financial+Services%22>
SuperintendentBen Lawsky
<http://www.timesunion.com/?controllerName=search&action=search&channel=
local&search=1&inlineLink=1&query=%22Ben+Lawsky%22>  said in announcing
the fines, which are for violations in 2009 and 2010.

Insurance companies said they have since rectified the problem.

"We are very pleased that the Department of Financial Services has taken
our concerns seriously," said Shelly Nortz, of the Timothy's Law
Campaign.

The largest fine went to Oxford Health Insurance
<http://www.timesunion.com/?controllerName=search&action=search&channel=
local&search=1&inlineLink=1&query=%22Oxford+Health+Insurance%22>  for
$969,200. Oxford operates primarily downstate. A related Oxford firm was
fined $323,640.

In the Capital Region, Empire Health
<http://www.timesunion.com/?controllerName=search&action=search&channel=
local&search=1&inlineLink=1&query=%22Empire+Health%22> , MVP and
HealthNow
<http://www.timesunion.com/?controllerName=search&action=search&channel=
local&search=1&inlineLink=1&query=%22Healthnow%22>  (Blue Shield
<http://www.timesunion.com/?controllerName=search&action=search&channel=
local&search=1&inlineLink=1&query=%22Blue+Shield%22>  of Northeastern
New York) were among those fined. "Once we discovered there was a
communication issue, we fixed it," said MVP Health Care
<http://www.timesunion.com/?controllerName=search&action=search&channel=
local&search=1&inlineLink=1&query=%22MVP+Health+Care%22>  spokesman
Michael Traphagan
<http://www.timesunion.com/?controllerName=search&action=search&channel=
local&search=1&inlineLink=1&query=%22Michael+Traphagan%22> .

"HealthNow provides the option for a variety of mental health benefits
to our employer groups. However, the requirement and process of written
notification to our small groups as required by the amendment to
Timothy's Law was not followed for a short period of time," HealthNow
spokeswoman Julie Snyder
<http://www.timesunion.com/?controllerName=search&action=search&channel=
local&search=1&inlineLink=1&query=%22Julie+Snyder%22>  said in a
statement.

"In this instance, written notification of the option to purchase
expanded coverage for small groups is in place and we remain compliant
with all aspects of Timothy's Law," she added.

Leslie Moran, spokeswoman for the state Health Plan Association
<http://www.timesunion.com/?controllerName=search&action=search&channel=
local&search=1&inlineLink=1&query=%22Health+Plan+Association%22> , said
the companies had notified customers of the mental health option through
emails or online, through brokers, but were supposed to send letters as
well. They have since started doing that.

"From our perspective, these fines seem disproportionately large," Moran
said.

She added that when Timothy's Law first passed, there was a state
subsidy to help small employers purchase the mental health coverage, but
that has been phased out due to budget shortfalls.

http://www.timesunion.com/local/article/Timothy-s-Law-fines-total-2-7M-3
544091.php#ixzz1uMypxigU

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://kilakwa.net/pipermail/nyaprs_kilakwa.net/attachments/20120509/979b35ad/attachment.html>