Aetna life insurance resolves allegations, paying $1M
BOSTON (Legal Newsline) - Massachusetts Attorney General Martha Coakley announced a consent judgment with Aetna Life Insurance Company on Wednesday resolving allegations of failing to cover certain medical services and using deceptive marketing practices.
Under the terms of the consent judgment, Aetna Life will pay more than $1 million in restitution and civil penalties.
Coakley's lawsuit and the consent judgment were filed in Suffolk Superior Court on Wednesday.
"When Massachusetts consumers buy health insurance, they should be able to feel confident that the coverage complies fully with Massachusetts law," Coakley said. "Our office will continue to monitor the marketing and payment practices of health insurers to make sure that Massachusetts consumers are not being misled or denied benefits to which they are legally entitled."
Aetna Life allegedly violated the state's Consumer Protection Act by deceptively marketing the scope of the coverage it offered to college students. The allegations include overstating in marketing materials the aggregate maximum amount of particular Aetna coverage as $500,000 when it was truly $50,000. In addition, Aetna Life allegedly failed to cover health services required by Massachusetts law, including preventive care for children up to six years of age, mammography, pap test screening and mental health care.
Under the terms of the settlement, Aetna Life must pay at least $500,000 toward consumer relief, $500,000 in civil penalties to the state and $55,000 for attorney costs to Coakley's office. Once the consumer relief fund has been used to pay back Massachusetts consumers, the remaining portion will be paid to the state.
Between 2007 and 2010, Aetna Life provided insurance to an average of approximately 30,000 annually. Consumers affected by the matter who are entitled to relief will be contacted by Aetna.