DFS Compliance and Enforcement

December 14, 2021

 The Department of Financial Services (DFS – responsible for overseeing commercial insurers) issued a press release this morning announcing consent orders and fines against three 

insurers for violations of the Mental Health Parity and Addiction Equity Act (MHPAEA) and New York Insurance Law.   

As the NYS Council continues to challenge state regulators and press for aggressive enforcement of laws and regulations pertaining to parity violations and inappropriate claims denials that impact access to care, we hope to see more actions like the ones (described below) by DFS AND DoH.  To this end, we continue our work as a partner in the NYS Mental Health and Substance Use Disorder Ombudsman Program (CHAMP)   As you may recall, several years we argued successfully for these funds to be set aside for future endeavors including the CHAMP Program.   On the Medicaid side, we recently met with Governor Hochul’s Counsel as we make the case for a carve out from Medicaid managed care, and the reinvestment of funds the state has an obligation to recoup from some MCOs resulting from their failure to meet certain financial requirements laid out in the rules of the carve in of our services.  

Here’s the Press Release:


Aetna, Oscar, and Wellfleet to Pay Penalties of $2.6 Million, Return $473,565 to Consumers, for Violating the Federal Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) and NY Insurance Law

Acting New York State Department of Financial Services (DFS) Superintendent Adrienne A. Harris today secured $3.1 million for New Yorkers, following DFS’ review of New York insurers’ compliance with state and federal cost-sharing requirements for mental health and substance use disorder parity.

DFS reviewed the mental health and substance use disorder parity reports that insurers are required to submit every two years to ensure that health insurers provide the same level of mental health and substance abuse disorder benefits that they do for medical care. The review found that Aetna, Oscar, and Wellfleet sold policies that required consumers to pay a copayment or coinsurance for mental health and substance use disorder benefits that was not permitted under the law.

“Now more than ever, mental health and substance abuse issues are a top priority as we come to the end of the second year of the COVID-19 pandemic,” said Acting Superintendent Harris. “It is our responsibility at DFS to ensure that New Yorkers in particular receive comparable benefits to medical care for mental health and substance abuse treatments, which can help an individual achieve critical health outcomes.”

The three insurers have agreed to DFS’ findings and have signed consent orders. The violations, monetary penalties, and consumer restitution amounts are below:

  • Aetna Life Insurance Company was fined $874,000 for violation of MHPAEA and New York Insurance Law, $376,000 for erroneous data reporting, and will return $439.20 to consumers;
  • Oscar Insurance Corporation was fined $1,000,000 for violation of MHPAEA and New York Insurance Law and will return $465,800 to consumers; and
  • Wellfleet New York Insurance Company was fined $425,000 for violation of MHPAEA and New York Insurance Law and will return $7,326.70 to consumers.

“I applaud the commitment that Acting Superintendent Harris and the Department of Financial Services have demonstrated on parity compliance,” said OASAS Commissioner Chinazo Cunningham. “We know that parity enforcement is essential for ensuring New Yorkers have access to substance use and mental health quality healthcare. Insurers who do not comply with the law must be held accountable. It is not only the law – it is a matter of life and death.”

The overall DFS monetary penalty is $2,675,000, of which $2,299,000 will go to the Behavioral Health Parity Compliance Fund which provides funding for initiatives supporting parity implementation and enforcement on behalf of consumers, including the Behavioral Health Ombudsman Program. The remainder of the penalty will go to the General Fund. The total consumer restitution is $473,565.90.

To access a copy of the consent orders, please go to the DFS website.