The Massachusetts Office of the Attorney General recently settled another in a series of cases in which a health insurer sold health care policies which did not include coverage for certain benefits that Massachusetts law requires be provided by any group insurance policy. In this case the insurer, The Insurance Company of the State of Pennsylvania (“ISOP”), sold insurance coverage to Massachusetts residents that did not include statutory-mandated benefits, such as mental health benefits, benefits for newborns and young children, maternity-related benefits, benefits for cytologic screenings and mammographic examinations, infertility-related benefits, emergency services, outpatient contraceptive services, drugs and devices, benefits for prosthetic devices, including their repair, and certain alcoholism-related benefits.
The Massachusetts statute governing health insurers, M. G. L. c. 175, identifies a number of benefits, including but not limited to the benefits itemized above, that must be included in any group health insurance policy sold to Massachusetts’ residents. Further, other state laws prohibit health insurance policies from containing any provision excluding coverage of preexisting medical conditions for more than six months following the effective date of coverage, prohibit health insurance policies from excluding coverage for preexisting medical conditions unless within the six months prior to the effective date of coverage or the date of enrollment they manifested themselves sufficiently or medical advice, diagnosis, care or treatment was recommended or received for them, and prohibit health insurance plans from excluding coverage during a waiting period for any services that were covered by previous equivalent coverage in certain situations.
Because Massachusetts’ requirements are sui generis and are independent of, and in addition to, minimum creditable coverage and any other insurance coverage requirements, insurers selling national health insurance policies that may be purchased by Massachusetts’ insurers frequently fail to include these Massachusetts-mandated benefits. The recent ISOP settlement is at least the thirteenth such settlement which the Office of the Attorney General has entered into over the past few years. Consistent with prior settlements, the ISOP settlement is reflected in a Consent Judgment which, among other things, includes retroactive payment for all Massachusetts-mandated benefits (even though not included in the policy sold), refund of all premiums paid by insureds for non-compliant policies, payment of a penalty to the Commonwealth, payment of the Commonwealth’s costs of investigation, and acceptance of a court order mandating future compliance with Massachusetts’ law. The moral of the tale for health care insurers is either to limit policy sales to non-Massachusetts residents or to review carefully Massachusetts’ individualized benefit requirements to make certain that those benefits are included in any health insurance policy sold to Massachusetts residents.