BOSTON (Legal Newsline) - Massachusetts Attorney General Martha Coakley announced Tuesday that a health insurer will pay more than $1.5 million in additional restitution after allegedly failing to comply with an earlier consent judgment.
Under the terms of a July consent judgment, Life Insurance Company of North America was required to refund premiums paid, minus insurance claims collected, to all Massachusetts consumers who had bought certain supplemental health insurance. LINA allegedly failed to provide all the relief required by the consent judgment.
As part of an amendment to the original settlement, LINA will collectively pay $5.25 million, including approximately $3.5 million in consumer relief and $1.75 million to the state.
"LINA's failures to comply fully with its obligations under the consent judgment are unacceptable," Coakley said. "This amendment will ensure that all Massachusetts consumers entitled to relief under the settlement will receive restitution from this company, and it will help further our ongoing efforts to ensure access to mental health services to veterans and their families."
Coakley's original complaint against LINA alleged the company marketed its supplemental health insurance coverage to veterans in a misleading way. The marketing allegedly made the insurance look like a government program and misrepresented the value of its health benefits.
LINA already paid more than $2.8 million in direct relief to Massachusetts veterans and their families and $1 million to the state.
The additional $1.5 million in restitution includes at least $750,000 in new restitution to consumers and $750,000 to the state. Half of the payment to the state will be used to promote initiatives designed to assist Massachusetts military veterans, seniors or individuals with mental health conditions. The other half of the payment to the state represents a civil penalty.
The matter is part of Coakley's continuing efforts to stop unfair and deceptive practices in the administration and marketing of health insurance.