NY State law is one of the strongest out there when it comes to insurance. Contestability period is limited to two years. After two years the insurance company cannot contest the policy. Even if they could do something, that would require them to go to court, which would not be worth it for them for such small amounts. The legal fees would simply not justify it, and they are likely to lose.
I'm not a lawyer, but would they necessarily have to take each individual to court? Would they not simply be able to claim before a judge that there was a pricing error and get authority to cancel all plans issued under that error and send a refund check to those individuals?
Furthermore, would they not be able to claim that licensed brokers knowingly advertised and signed up individuals for this plan which was clearly a pricing error?