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DFS Approves CVS Health's Acquisition of Aetna Insurance

Posted on November 27, 2018 at 1:35 PM
New York's Department of Financial Services announced that it has approved CVS Health Corp. and CVS Pharmacy Inc.???s application to acquire Aetna Health Insurance Company of New York, a New York domestic stock accident and health insurance company, following a public hearing and extensive public comment period. DFS approved the acquisition subject to a number of conditions to which CVS and Aetna have agreed including enhanced consumer and health insurance rate protections, privacy controls, cybersecurity compliance, and a $40 million commitment to support health insurance education and enrollment and other consumer health protections. As part of DFS???s approval, CVS has agreed to specific conditions that the Department demanded to protect New York consumers, including: - No funds from any Aetna company or affiliate covering New Yorkers can be used to pay for CVS???s acquisition - Costs derived from the acquisition, including executive compensation, cannot be passed on to any domestic or foreign Aetna New York insurer - Increased health insurance rates cannot be sought in New York to pay for the cost of the acquisition and premiums and cost-sharing owed by policyholders cannot increase - Dividends cannot be paid by Aetna without the express prior approval of the Superintendent for a period of three years - Annual reports for three years documenting details of the progress toward achieving promised synergies must be provided to DFS - Current products throughout the Aetna New York service area must be maintained for three years following the approval - One or more new products must be made available by Aetna to the small and large group markets within two years from the approval through an existing or new New York-domiciled insurer - Roll-out of health care measures must be done fairly and equitably in New York, including in underserved communities $40 million to New York State, over a three-year period, to support health insurance education and enrollment activities and strengthen New York health care transformation activities, which may include payments to the New York State Health Care Transformation Fund - An independent third-party audit assessing whether Aetna employees have accessed Confidential Information in violation of firewall policies submitted to DFS within one year of the approval - Adherence to DFS???s nation-leading Cybersecurity Regulation, including filing the required annual certificates of compliance to DFS - No preferential pricing to any Aetna-affiliated health insurer licensed in New York, including any managed care organization certified in New York, that considers the fact that the health insurer is Aetna-affiliated - Ensuring that participating provider networks for insured products maintain access to non-chain New York pharmacies for three years from the approval DFS will continue to exercise its broad authority to conduct examinations of Aetna and any entity within its holding company structure, including CVS and CVS Caremark, its pharmacy benefit manager where DFS has cause to believe such entity can affect the operations, management or financial condition of any insurer licensed in New York. DFS will use all regulatory tools, including special reports, to review the past and future conduct of CVS Health, CVS Pharmacy, and CVS Caremark, as well as Aetna Inc. and its affiliates, and take every action necessary to ensure that the representations made in the course of this approval were fully accurate and that the parties keep all commitments made. Read More: Release https://www.dfs.ny.gov/about/press/pr1811261.htm A copy of the decision and order approving the acquisition, as well as the conditions required, is available below: https://www.dfs.ny.gov/about/press/CVS_final_signed_decision_and_condition.pdf

Categories: General