Free Case Evaluation

The Kaiser Foundation Health Plan and Health Net have settled potential litigation with California’s Department of Managed Care (DMHC) by agreeing to pay fines and reinstate over 1,100 rescinded health insurance policies over the past four years.

Details of the settlement

Under the terms of the settlement, Kaiser and Health Net would each pay a fine of $3,000 and reinstate over 1,100 health care insurance policies (1,092 from Kaiser and 85 from Health Net) that were rescinded over the past four years as well as making those policyholders eligible to go through an independent arbitration process to resolve claims payment issues which may have occurred during the period of non-coverage.

Specifically, policyholders:

• May purchase insurance from the insurers at the standard rate and will be able to get the insurance regardless of pre-existing conditions.
• Will receive any monies collected from the insurers prior to the policy rescission.
• May submit additional claims for other damages that resulted from the rescissions (known as gap damages). The insurers have said that they will offer a settlement of these damages within 60 days or have a third party arbitrator review disputed damages.
• Have the option of bringing a private lawsuit against the insurers instead of participating in the settlement.

For additional information on the settlement terms, go to: www.hmohelp.ca.gov/aboutthedmhc/gen/ann/ann_landmark.asp/

Other insurers may settle with DMHC

The DMHC has said that other California insurers, such as PacifiCare, Blue Shield and Anthem Blue Cross have been approached to settle their outstanding issues with the Department. However, Kaiser and Health Net have been the first to settle their claims.

The DMHC’s Director Cindy Ehnes, along with California’s Insurance Commissioner Steve Poizner, have been cracking down on illegal rescission processes in the industry – especially by California’s largest insurers, Kaiser Permanente, Health Net, PacifiCare, Blue Shield and Anthem Blue Cross. According to Ehnes, “Our goal is to get all consumers … covered again without having to go through a long process that may not be decided in their favor.”

Illegal policy rescissions amount to bad faith insurance practices. If your insurance company has rescinded your policy or denied your valid benefits, contact an attorney whose practice focuses on bad faith insurance law. Consultations are free, without obligation and are strictly confidential. To contact a qualified attorney, please click here. We may be able to help.