UPDATE 1-Cigna gets government OK to sell Medicare plans again

(Adds details, CMS not available)

NEW YORK, June 16 (Reuters) - Cigna Corp, whose Medicare Advantage health insurance business has been on hold for the past 18 months, said on Friday that the U.S. government had lifted sanctions and it could enroll new customers starting July 1.

The Centers for Medicare and Medicaid Services had suspended enrollment in January 2016 citing "widespread and systemic" failures that prevented patients from accessing medical services.

The government has freed Cigna to market its Medicare Advantage health insurance for people aged 65 or older and the disabled as well as its Medicare prescription drug plans, Cigna said in a regulatory filing.

The government imposed the sanctions after it found that Cigna did not handle complaints and grievances properly from patients who had been denied coverage for health benefits or drugs. It also found problems with Cigna's handling of its list of covered drugs. The 18-month time period is fairly typical for sanctions, which were previously levied on competitor Aetna Inc .

CMS did not have an immediate comment on the lifting of the sanctions.

Cigna shares rose 1 percent to $169 in afternoon New York Stock Exchange trading. (Reporting by Caroline Humer; Editing by Phil Berlowitz and Leslie Adler)