Missouri Insurance Department Reaches $7.8 Million Settlement with Anthem

The Missouri Department of Insurance, Financial Institutions and Professional Registration (DIFP) recently announced that it has entered into a $7.8 million regulatory settlement with Healthy Alliance Life Insurance Co. and HMO Missouri Inc., which are subsidiaries of Anthem BlueCross BlueShield of Missouri (Anthem), and a part of WellPoint, Inc. Our firm's Summer 2012 Insurance Business & Regulatory newsletter discussed a recent increase in Missouri market conduct examination activity and our firm's February 2014 eAlert discussed the increasing monetary penalties sought by the DIFP in connection with market conduct examinations. The settlement with Anthem is the largest reached in the DIFP's history.

The DIFP alleges that the health insurers offered two substantially equivalent health plans to St. Louis area consumers but charged more in premiums for one of those plans without informing consumers about the lower-priced plan. The Stipulation of Settlement states that the plans were marketed in the individual market in Missouri from 2007 to 2010 in the city of St. Louis, Missouri and in the following Missouri counties: St. Louis, St. Charles, Warren, Franklin, Jefferson, St. Francois, Lincoln, Ste. Genevieve and Washington counties. According to the Stipulation of Settlement, Anthem denies wrongdoing and any failure to provide information.

Under the terms of the settlement, approximately 5,500 individuals in Missouri will receive refunds for premiums previously paid for the more expensive plan. Any settlement funds remaining as of May 31, 2015 will escheat to the Missouri Treasurer as unclaimed property.

According to the DIFP, its market conduct section has recovered more than $33 million in consumer restitution and fines since 2009.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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