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State fines health insurers over use of religious exemption to deny birth control coverage

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Posted at 10:03 AM, May 07, 2019
and last updated 2019-05-07 11:11:05-04

BUFFALO, N.Y. (WKBW) — New York State's Department of Financial Services says ten health insurers will have to reimburse members after refusing to provide contraceptive coverage. They include major Western New York insurers HealthNow New York, Inc., which is the parent company of Bluecross Blueshield of WNY, Independent Health Association, and Independent Health Benefits Corp.

The DFS says these companies exempted employers from providing contraceptive coverage when they should not have. An investigation found a number of them improperly granted religious employer exemption requests to more than 30 entities that did not meet the actual requirements. In many cases the investigation found that the companies, "were clearly not religious employers." Examples of those employers included a wood floor refinisher, a cafe, and a tax consultant.

The insurers will now have to take corrective action, including contacting members who should have gotten written notice of the rider coverage, and making restitution for contraceptive drugs and devices during a certain time period, as well as reimbursing members who were denied coverage and had to pay out of pocket for some things. They will also have to create a "more robust review process to ensure insurers thoroughly review future religious employer exemption requests." The insurers will also have to pay a collective fine of $509,000.

For more information on the DFS investigation, click here.

In response to the investigation, HealthNow New York issued the following statement:

"HealthNow New York Inc., parent company of BlueCross BlueShield of Western New York, cooperated fully with the New York State Department of Financial Services (DFS) during its inquiry into this matter.

The issues identified by DFS relate to an internal review process that inadvertently approved requests from five (5) employer groups for a Religious Exemption from providing contraceptive coverage to their enrollees during the outlined time from January 2016 to December 2017. This time period included changes in DFS rules. Our internal review process has been updated to ensure future compliance with the State’s requirements.

Employees at these insured groups still had access to contraceptive coverage at no additional cost per New York State’s mandate. Because the exemption law requires that health plans send notices to impacted members, we did notify all members in these employer groups who wanted coverage that they could nonetheless receive contraceptive coverage at no cost."