Oxford Health Insurance offers $50 million in refunds in overcharged insurance lawsuit.

New York, NY: (May-29-08) The state of New York brought charges against UnitedHealth Group Inc's Oxford Health Insurance unit, alleging that it overcharged customers on health insurance policies in 2006. Sources close to the lawsuit stated that as part of a settlement reached, UnitedHealth Group Inc's Oxford Health Insurance unit has agreed to refund $50 million to nearly 37,000 small businesses in New York.

Under the terms of the deal, the refunds will be paid to 36,746 small business policyholders in New York City, Long Island and the city's northern suburbs with about 300,000 employees and family members. The payments, which will vary depending on the number of covered individuals, amount to an average of $1,360 per business. State officials said that it is about 5.5% of the total average annual premium in 2006. They stated that the settlement affects policyholders of Oxford's small group Freedom Plan Direct, Freedom Plan Metro and Freedom Plan EPO products. It does not affect Oxford's small group and direct pay HMO and "point of service" policyholders.