UPDATE 1-Health Net agrees with Calif. regulators to pay fine
(Changes source, adds company comments)
BANGALORE, Sept 12 (Reuters) - Health Net Inc (HNT.N) has agreed with the California Department of Insurance to pay $3.6 million in penalties and about $14 million in reimbursements for medical charges.
The company has also agreed to reinstate the healthcare coverage of 926 people whose policies it canceled after they got sick and halt improper cancelations in the future, California Department of Insurance said in a news release.
The Woodland Hills, California-based company, however, did not admit to 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 Chief Executive Jay Gellert said in a statement.
The agreement allows Health Net to avoid being targeted for more enforcement action relating to potential legal violations uncovered by auditors.
Health Net may also be required to pay an additional penalty of as much as $3.6 million if a follow-up examination finds that it did not correct all deficiencies.
The Department of Insurance has been imposing a series of similar insurer fines and penalties through the State Department of Managed Health Care. The two agencies together regulate health insurance in California.
Health Net, which is one of the five major California health insurers under investigation for improper rescissions of coverage, agreed to make significant changes to its application form, underwriting process, agent training and consumer notifications.
The health insurer has been facing several lawsuits, fines and penalties related to delaying or denying payment of thousands of medical claims.
Shares of the company were down 16 cents at $26.33 in afternoon trade on the New York Stock Exchange. (Reporting by Sweta Singh and Esha Dey in Bangalore; Editing by Paul Bolding and Deepak Kannan)
