Aetna Life Insurance Company has agreed to pay more than $1 million in civil penalties and restitution pursuant to a consent judgment announced today. In a complaint the Attorney General filed in Suffolk Superior Court along with the consent judgment, the AG alleged that the life insurance company had violated Massachusetts Consumer Protection Act by deceptively marketing its coverage to Massachusetts college students.
More specifically, the AG claimed that Aetna Life engaged such practices as excessively overstating in marketing materials the aggregate maximum amount of certain Aetna coverage as $500,000 when in reality is was $50,000. It also alleged the company failed to cover certain basic health services which are required to be covered under state law including services like mental health care, “pap” test screening, mammograms and preventive care for children up to age six.
“When Massachusetts consumers buy health insurance, they should be able to feel confident that the coverage complies fully with Massachusetts law,” AG 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.”
In Massachusetts, all full-time and some part-time students at institutions of higher learning must participate in a qualifying student health insurance program (unless they obtain a waiver after showing comparable coverage.) According to a report from the Massachusetts Division of Health Care Finance and Policy, from 2007 through 2010, Aetna Life insured the majority of college-age students in Massachusetts through student health insurance programs at more than 13 different colleges and universities. The AG’s estimates that based upon this information and other public information available, Aetna Life insured a total of 150,000 students during this time period (or 30,000 per year).
As a result of today’s announcement, Aetna Life will be required to pay a minimum of $500,000 towards relief measures for Massachusetts consumers after which any remaining portion will them be paid to the Commonwealth. Aside from this payment, Aetna Life also has agreed to pay an additional $500,000 in civil penalties to the Commonwealth and $55,000 as reimbursement to the Attorney General’s offices for costs associated with its investigation. The AG’s office noted that affected consumers who are entitled to relief will be contacted directly by the life insurance company.