Misleading Insurance Letter, Humana Fined $65,430

The Humana Building in Louisville, Kentucky |  Photo: Kevin Abbott

The Humana Building in Louisville, Kentucky | Photo: Kevin Abbott

By Chris Kenning

The Kentucky Department of Insurance has fined Humana $65,430 because it offered policyholders an unapproved opportunity to amend their insurance as part of a letter that regulators have called “misleading.”

The department investigated letters sent in August to 6,543 individual plan policyholders in Kentucky. The letters said they needed to renew their plans for 2014 within 30 days or choose a more expensive option that complies with the Affordable Care Act.

But regulators last month called the letters misleading, arguing they did not make sufficiently clear that policyholders could compare and choose competing plans on the state’s health insurance exchanges, which open on Oct. 1, and for which they could be eligible for federal subsidies.

Humana’s letter mentioned the exchange enrollment period, but only in a footnote. It also said a customer can get the cheaper premium option by agreeing to changes that hadn’t been approved by the state insurance department.

While the investigation continues into whether the letter was intentionally misleading, state officials said, the department fined Humana on Sept 10 for the unapproved amendment that “caused confusion” among policyholders. An estimated 2,200 returned signed amendments, it said.

20130924-Y20000924-YSK“The Department of Insurance fined Humana for providing members with a policy amendment form that was not approved. This was a clear-cut violation of Kentucky’s insurance code,” said Sharon Clark, Insurance Department commissioner.

“The Department has other concerns with the letter and with Humana’s actions. We have met with Humana and continue our investigation. We will take additional administrative action, if appropriate,” she said.

Clark has previously said she considered the letter “misleading intentionally.”

Humana spokeswoman Kate Marx said Tuesday that the company “is working in concert with the state Department of Insurance. Humana does not plan to appeal the decision.”

State insurance officials say that Humana has told them they would send a clarification to those who had gotten the letter in question.

Kentucky regulators also reviewed a letter by Anthem Blue Cross Blue Shield asking people to “call now” to lock in “today’s affordable rates,” targeting people who buy insurance on their own and who will soon be able to compare plans on the state insurance exchange.

However, a spokeswoman said the insurance department determined that the letter was marketing that appeared to go to potential customers and thus did not violate the insurance code. Humana’s letter, by contrast, went to current policyholders.

This article first appears in the Courier Journal.