Kaiser Permanente and Health Net agreed to return the medical coverage to nearly 1,200 Californians who lost their health insurance due to a series of high medical expences.

The two companies reached an agreement with the California Department of Managed Health Care which conducted an investigation about the controversial insurance practice of the large number of retroactively canceling, or rescinding, health coverages.

State regulators have been investigating the issue since 2006 and reached the conclusion that among many other wrongdoings, in several cases insurers clinged on to various minor errors in order to justify their decision to drop the medical coverage.

The new agreement states that Kaiser Permanente will permit 1,092 former members to get new individual policies, with their medical history not being considered a factor. The Department of Managed Health Care also slapped Kaiser with a $300,000 fine and outlined the possibility of demanding another $3 million if the agreement’s terms will not be followed to the letter.
Jerry Fleming, senior vice president of Kaiser Permanente, said according to the Los Angeles Times that the company insists on a quick clear up of past issues in order to guide all their efforts toward a long-term solution for the healthcare coverage problems.

Health Net also agreed to reinstate 85 former insurance owners.

The new plan was generally received with a positive feedback and at this point, the former members are being contacted by the two companies with presentations of their new offers.