Business

Aetna, Massachusetts settle insurance dispute for more than $1m

Aetna Life Insurance Co. has agreed to pay more than $1 million in civil penalties and restitution to settle charges that it failed to cover health insurance benefits mandated by Massachusetts law and deceptively marketed health care coverage to college students in the state.

The deal was spelled out in a consent judgment filed Wednesday in Suffolk Superior Court in Boston, along with a complaint by Massachusetts Attorney General Martha Coakley, outlining the scope of alleged consumer violations by the national insurance giant.

Advertisement

Over the past three years, Coakley’s office has filed suit or reached settlements with more than 10 companies and individuals in cases involving fraudulent marketing of health plans, or coverage that does not meet consumer protection standards required by Massachusetts law. The largest was a $17 million settlement in 2009 with Texas-based HealthMarkets Inc. and two of its subsidiaries.

Aetna provided insurance coverage to an average of 30,000 college students each year between 2007 and 2010, the attorney general’s office said. According to its complaint, the company, a division of Hartford-based Aetna Inc., stated in marketing materials that the aggregate maximum amount of some Aetna coverage was $500,000 when it actually was $50,000.

Get Talking Points in your inbox:
An afternoon recap of the day’s most important business news, delivered weekdays.
Thank you for signing up! Sign up for more newsletters here

The complaint also alleged Aetna did not cover health services required by state law, including mental health care, pap test screening, mammography, and preventive care for children.

“Aetna deceived Massachusetts consumers into buying health insurance by misrepresenting the terms, benefits, and coverage of the health insurance, by act and material omission,” the complaint said. It also said the insurer did not tell prospective customers about “significant limitations on its health insurance plans offered in Massachusetts.”

Susan G. Millerick, a spokeswoman for Aetna, said Wednesday that the insurance carrier “endeavors to provide clear and comprehensive coverage through plans that serve various customer needs, including student health and limited benefit plans. We believe we have already addressed many of the concerns raised by the attorney general.”

Advertisement

The company agreed to pay at least $500,000 to reimburse consumers and another $500,000 in civil penalties to the state, as well as $55,000 to cover the cost of Coakley’s investigation. Aetna insured the largest number of Massachusetts college students between 2007 and 2010, selling health plans at more than a dozen colleges and universities, the Massachusetts Division of Health Care Finance and Policy said.

Robert Weisman can be reached at weisman@globe.com.
Loading comments...
Real journalists. Real journalism. Subscribe to The Boston Globe today.
You're reading  1 of 5 free articles.
Get UNLIMITED access for only 99¢ per week Subscribe Now >
You're reading1 of 5 free articles.Keep scrolling to see more articles recomended for you Subscribe now
We hope you've enjoyed your 5 free articles.
Continue reading by subscribing to Globe.com for just 99¢.
 Already a member? Log in Home
Subscriber Log In

We hope you've enjoyed your 5 free articles'

Stay informed with unlimited access to Boston’s trusted news source.

  • High-quality journalism from the region’s largest newsroom
  • Convenient access across all of your devices
  • Today’s Headlines daily newsletter
  • Subscriber-only access to exclusive offers, events, contests, eBooks, and more
  • Less than 25¢ a week
Marketing image of BostonGlobe.com
Marketing image of BostonGlobe.com