January 06, 2015

Missouri insurance regulators fine Humana for misstatements to policyholders

Insurer accused of claiming health insurance rates are approved by state

Jefferson City, Mo. - The Missouri Department of Insurance today announced that a regulatory settlement agreement has been reached with Humana Insurance Company.  Missouri regulators conducted a market conduct investigation into correspondence Humana sent to 1,618 policyholders that included alleged misrepresentations. Humana has agreed to pay a $161,800 fine to the Missouri State School Fund.

Humana sent notices to Missourians that stated, "Due to Missouri legislation, Humana is required to terminate your current policy on 12/31/13 and replace it with a new policy with 2014 ACA benefits starting January 1, 2014." No such Missouri legislation has ever been enacted. 

In addition, the Humana notices stated, "The 2014 ACA compliant policy and premium has been filed with your state's Department of Insurance (DOI) and is subject to the DOI approval. We must inform you that if the DOI does not provide us with the required approval of our policy and premium by November 15, 2013 we will have no other choice but to terminate your coverage as of 12/31/13." The department does not have any health insurance rate approval authority, nor are rates required to be filed in Missouri.

"Health insurance is the only major line of insurance in which rates are not filed with the department," said Department of Insurance Director John M. Huff. "Residents in other states throughout the country have the benefit of rate transparency and regulatory protection from health insurance rates that are excessive, inadequate or discriminatory. Insurance companies may not mislead Missourians into believing they have the same regulatory protections that other states provide."

In market conduct exams and investigations, the department reviews how insurance companies treat policyholders. This includes how premium rates are set (except for health insurance), how claims are handled and other responsibilities under state law. These market conduct reviews can result in consumer refunds, fines and corrections in business practices, as well as other remedies. In the last five years, market conduct enforcement actions have generated nearly $35 million in payments from insurance companies. The money goes toward consumer refunds, general revenue and the Missouri State School Fund.

Consumers who have complaints or questions about health and other types of insurance can call the Insurance Consumer Hotline at 800-726-7390 or visit insurance.mo.gov.

About the Missouri Department of Insurance, Financial Institutions & Professional Registration

The Missouri Department of Insurance, Financial Institutions and Professional Registration (DIFP) is responsible for consumer protection through the regulation of financial industries and professionals. The department's seven divisions work to enforce state regulations both efficiently and effectively while encouraging a competitive environment for industries and professions to ensure consumers have access to quality products.

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