The Blue Cross Blue Shield insurance group has been involved in a class-action lawsuit regarding its anticompetitive policies since 2012.
Brought by a class of over 1M plaintiffs, the suit claims the company violated antitrust laws and benefitted by dividing insurance markets to avoid competition among its member companies, and thus boosting prices.
A settlement of $2.67B to impacted class members, along with adjustments to how the insurance group conducts business, has been proposed and preliminarily approved, marking a near end to the eight years of litigation.
The $2.67B will be distributed in part to the plaintiffs’ counsel for legal and administrative fees, with the remaining funds allocated among the fully-insured and self-insured class members.
The settlement class period for fully-insured businesses and individuals is February 7, 2008 through October 16, 2020, while the class period for self-funded businesses only is September 1, 2015 through October 16, 2020. Excluded from the settlement are stand-alone vision and dental plans. The Settlement Administrator will determine how the funds are allocated and the Notice and Claims Administrator will provide notice to eligible class members.
The majority of the settlement funds will be distributed within 30 days of the court’s entry of final judgement tentatively scheduled for October 20th-21st, 2021.
Note: Impacted members should be cautious of organizations that claim to be official administrators of the class-action as many of these entities are third-parties seeking to provide unnecessary services at a high cost (20% or more of the settlement monies owed). Impacted members will not require representation to receive monies owed.
As additional information on the settlement becomes available, it will be published here: BCBS Settlement. In the interim, it is important to note the settlement terms take into account pro-competitive reforms that will change the nature of the defendants’ business moving forward, such as the elimination of their “National Best Efforts” program, which is estimated to have accounted for 97% of the total damages, and the opportunity for certain Qualified National Accounts (self-funded accounts with at least 5,000 employees throughout the country) to receive a second bid from a national Blue Cross company. Additionally, limits on the use of the “Most Favored Nations” Clauses and Differentials and on Blue Cross’ restraints on acquisitions (i.e., whether an individual Blue Plan may be acquired by another Blue Plan) are included. There will also be a five-year monitoring period to review new rules or practices proposed by the insurance group in their business dealings.
We are continuing to monitor the situation and will provide updates when available.
DISCLAIMER: This information is not considered legal or tax advice or opinion. Please consult your legal counsel and tax advisor concerning any legal or tax questions or issues.