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Health Net Settles Over Claims Handling Complaints

September 15, 2008
Related Topics: Medical Benefits Law, Health and Wellness, Workforce Planning, Latest News

Health Net Inc. has agreed to a multimillion-dollar settlement over allegations of unfair claims handling and policy cancellations, according to the California Department of Insurance.

The Woodland Hills, California, health care insurer will be required to pay $14.2 million in billed medical charges and  waive $7.2 million in insurance premiums and possibly pay a $3.6 million penalty to the state.

The company also will be required to reinstate health care coverage for 926 consumers whose policies were canceled during the past four years and prevent improper rescissions going forward, according to the California regulator’s statement.

Finally, Health Net could be fined an additional $3.6 million if it doesn’t correct all the issues stipulated in the settlement. The settlement was in response to consumer complaints of unfair claims handling and improper rescission practices dating back to 2004. Health Net denies any wrongdoing.

“While we do not necessarily agree with the California Department of Insurance’s allegations, we do believe it is time to move forward and make sure these affected individuals can obtain coverage,” Health Net CEO Jay Gellert said.

Filed by Kristin Gunderson Hunt of Business Insurance, a sister publication of Workforce Management. To comment, e-mail

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