Dayna DeHaven Sep. 12, 2014, 1:34pm

New York Attorney General Eric T. Schneiderman announced on Tuesday that his office reached a settlement with New York's largest health insurer GHI.

The agreement requires improved member communications for New Yorkers, including improved plan disclosures for out-of-network provider benefits, and requires GHI to establish a $3.5 million consumer assistance fund and pay $300,000 in penalties to the 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,” Schneiderman said. “Consumers need to have accurate information in order to make informed decisions when selecting their health plans.”

The GHI Comprehensive Benefits Plan, one of the plans offered to New York City employees and retirees, allegedly did not properly disclose how out-of-network benefits are reimbursed and affect out-of-pocket expenses. There were four alleged problematic areas in the plan, including how members can access the reimbursement schedule, out-of-network financial consequences, the circumstances by which members encounter out-of-network providers unknowingly and the frequency with which the out-of-network reimbursement schedule is updated.

“Health insurance companies owe it to their members to be transparent about the costs members will incur,” Schneiderman said. “Those costs, no matter how big or small, must not be unexpected.”

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