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State fines HealthNow $750,000 for insurance law violation

State insurance regulators have fined Buffalo-based HealthNow New York $750,000 for improperly denying coverage to small groups of fewer than five members.

The state Department of Financial Services said Wednesday that HealthNow, which does business locally as BlueCross BlueShield of Western New York, that the violations of insurance law occurred between 2007 and 2013. The company also operates in northeastern New York.

The department said HealthNow limited renewals of small-group policies to those with at least five members, when state law requires that an insurer participating in the small-group market offer coverage to all groups of between two and 50 members.

A consent order filed by the department said HealthNow set this limit to avoid high loss ratios. The department did not immediately say how many small-group employers were affected by the violation of coverage.

HealthNow accepted the order and the fine and ended the improper underwriting practice for policies that took effect in January 2014.

Company spokeswoman Julie Snyder said in a statement Wednesday that it cooperated fully in the department’s investigation, will not pass any premium increases onto its members as a result of paying this fine and remains focused on the best services for its members.

email: swatson@buffnews.com