North Country Students Could Get Refunds In Insurance Deal

Tools

More than 2,500 college students in northern New York were overcharged for their health insurance plans, according to two top state officials.

The officials announced a settlement Tuesday with Markel Insurance Company, which provided student health insurance and other college-related insurance.

Markel agreed to pay $2.75 million to more than 22,000 students and 34 colleges statewide. It averages out to $107 a student, according to the Attorney General's office.

Markel overcharged by nearly $3 million and paid improper broker bonuses, according to a joint announcement from Department of Financial Services Superintendent Benjamin Lawsky and Attorney General Eric Schneiderman.

"Running up the health insurance bills of students and parents trying to make ends meet is objectionable, and simply will not be tolerated," Lawsky said.

In northern New York, students at almost all colleges were overcharged, according to the statement. That includes: 1150 at St. Lawrence University, 750 at Clarkson University, 600 at SUNY Potsdam and 40 at Jefferson Community College. SUNY Canton does not appear on the list.

"It did come as a surprise since it really wasn't on anybody's radar," said Ryan Deuel, SLU's director of media relations.

According to the joint statement, New York State insurance regulations require that health insurance plans maintain a minimum “loss ratio” of 65%. A loss ratio is the ratio of the amount paid out in claims under a plan compared to the premium charged under that plan, and requires health insurance plans to pay at least 65 cents on medical care for every dollar of premium.

For policy years 2007-08 to 2009-10 and again in 2011, Markel’s student health plans and college accident insurance plans and sports accident insurance plans paid out far less in claims than was required to meet the 65% loss ratio standard, leading to overcharges, again according to the statement issued by Schneiderman's office.

"Markel’s overcharges to students were especially troubling because many students had little or no choice but to enroll in the health plans. The Markel plans were promoted and endorsed by the colleges where they were offered, and at some colleges, students were actually required to enroll in Markel’s health insurance plan unless they could show that they had comparable coverage through a parent’s insurance or from an employer," according to the statement.

"In addition, the investigation revealed that Markel entered into broker compensation agreements with at least one broker that provided that Markel would only pay the broker a bonus if the plan’s loss ratio was kept below 60%. Such agreements create conflicts of interest for the broker and financial incentives for brokers to break New York law," according to the statement.

Students are eligible for a refund if they were enrolled in a Markel plan between 2007 and 2010, or 2011-2012. Markel has stopped offering student health plans in New York.

The statement does not specify how students can apply for refunds.

 

 

 

Thursday, April 17, 2014
, Watertown, NY

On Demand

This content requires the latest Adobe Flash Player and a browser with JavaScript enabled. Click here for a free download of the latest Adobe Flash Player.

On Wall Street

What's On TonightFull Schedule