Assurant to Pay $1.7 Million

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Restitution resolves dispute over higher prices for sick consumers

HELENA, Mont. – The Assurant health insurance company has agreed to refund nearly $1.7 million to Montanans to resolve a complaint that the company charged two different prices for the same health insurance policies: a lower price for healthier customers and a higher price for sicker Montanans.

The company has also agreed to pay a $25,000 fine.

“Charging higher prices to sick people for the same health insurance policy is discrimination,” said Montana Insurance Commissioner Monica J. Lindeen, whose office investigated the issue and worked out the agreement with Assurant. “That’s not how health insurance works in Montana.”

Assurant, Inc. , does business in Montana under the names Time Insurance Company and John Alden Life Insurance Company. Both are wholly-owned subsidiaries of Assurant, Inc. and marketed as “Assurant Health.”

Assurant Health offered so-called “discounts” to customers who had very few health insurance claims. The discounts resulted in a price structure that charged sicker Montanans more for the same policies.

It’s not uncommon for people with greater health care needs to spend more overall on their medical costs. But the law requires that companies charge the same for their policies. The law is intended to eliminate discrimination against consumers.

Lindeen’s office investigated the price structure at Assurant and worked out a consent agreement with the company to resolve the dispute.  The settlement was signed on July 1 and resulted in the $25,000 fine and approximately $1.7 million to Montanans who paid higher prices.

An estimated 1,600 polices were sold in Montana who paid more for their policies than healthier people. Those policyholders should begin receiving discounts in November. The extra time is to allow Assurant to calculate the exact amount of refund – plus interest – Montanans deserve.

Assurant has previously announced it would be leaving the national health insurance market beginning in 2016. The company is the smallest of the four main companies selling health insurance in Montana.