Health insurer settles with state on mandated benefits

An insurer that allegedly failed to provide health benefits required by Massachusetts law and marketed policies promising more coverage than they delivered will pay the state $25,000 and review past claims denials, the state attorney general's office announced today.

Continental American Insurance Company agreed to pay $25,000 to the attorney general's Local Consumer Aid Fund, following a complaint filed by the state last month in Suffolk Superior Court. In the complaint, the state alleged that Continental American failed to cover preexisting conditions as well as such mandated benefits as mental health services; preventive care for children under 6; prenatal, childbirth, and postpartum care; mammograms; infertility treatment; and alcoholism treatment.

Messages seeking comment from Continental American were not immediately returned. The company was acquired by Georgia-based Aflac Inc. in October.

Massachusetts settled a larger case in September with HealthMarkets Inc. and its subsidiaries MEGA Life and Health Insurance and Mid-West National Life Insurance, which allegedly misled people into buying low-cost health insurance policies and then denied coverage after they became ill. The company agreed to pay $17 million in what the state said might be the largest consumer protection settlement against a health plan in Massachusetts history.