Web site statement
from Connecticut Attorney General Richard Blumenthal and
Comptroller Nancy Wyman said CIGNA charged the state for
the broker commissions in connection with the state dental
plan. The CIGNA payment represents a reimbursement for all
commissions paid in connection with this account from 1989
to 2004, a total of $481,245. In addition, CIGNA paid the
state approximately $390,000 in interest.
State officials said they repeatedly warned CIGNA that the dental contract must not include commissions to agents and brokers, and CIGNA assured the state that no commissions would be paid, according to the Blumenthal statement. Despite these assurances, the company made such payments to insurance broker Carl Feen, a former CIGNA employee, since 1990.
The state officials said the CIGNA commission payment includes reimbursement for the improper commissions, plus interest. CIGNA has also promised to no longer charge or pay commissions in connection with the state dental plan and will reduce the remainder of the state’s premiums on the plan, according to the announcement.
In 1990, CIGNA won the contract bid to provide dental insurance benefits to state employees and retirees – and continues to provide these services. In an April 3, 1990 letter, CIGNA promised the state that it would not charge for any commissions in connection with the dental plan, but evidence shows that the plan was charged for the commissions beginning in at least 1995, the officials said.
The CIGNA dental HMO contract covers 10,000 to 11,000 state employees, retirees, and dependents. It is not the only dental insurance offered to state workers. The state is putting dental and health insurance out to bid again, and bids are due by January 6, according to the Hartford Courant.
For its part, CIGNA insisted in a Web statement that it actually discovered the situation and voluntarily offered to pay back the state.
“The inclusion of any commission in the dental rates was an error on CIGNA’s part which entered into its payment process a number of years ago,” CIGNA said in its statement. “Once in the system, it mistakenly continued until very recently.”
CIGNA said further, “As stated in CIGNA’s settlement agreement with the State, there was no intentional misconduct on the part of CIGNA or any past or present CIGNA employees. CIGNA cooperated fully with the State by bringing this issue to light, by cooperating fully with the Attorney General both before and after he issued a subpoena in November, and by moving quickly to correct the identified error.”
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