Financial Services Superintendent Maria Vullo alleged Cigna sold stop-loss insurance — which pays employees’ medical bills after an employer meets all out-of-pocket requirements — and other policies to small-group members.
In New York, stop-loss insurance may be sold only to large group employers that self-fund underlying medical bills. However, under a consent order the department entered into with Cigna, DFS claimed Cigna improperly sold stop-loss and other plans outside of New York to New-York-based small groups.
“By deliberately choosing to write New York risks outside of New York, Cigna’s actions harmed New York’s community-rating program for small group employers,” said Ms. Vullo. “Cigna cherry-picked risks, which may have improperly induced forum shopping in the New York small-group market.”
In an emailed statement to Becker’s Hospital Review, Cigna said it “agreed with the New York Department of Financial Services to resolve this matter and would welcome the opportunity to work with the Department and insurers in developing industry guidance regarding the scope of New York’s small group law in order to ensure a level, competitive playing field.”
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