Doctor, Doctor . . . Health Plan Litigation Update

Holland & Hart - The Benefits Dial

Holland & Hart - The Benefits Dial

For individuals who work with employer-sponsored benefit plans, the past 18 months has been packed with new developments from federal and state legislatures as well as executive branch initiatives and regulatory guidance. Today’s post covers two cases from the judiciary impacting employer-sponsored health plans.

SCOTUS and the ACA. Yesterday, the U.S. Supreme Court rejected challenges to the Affordable Care Act (ACA) in Texas v. California.  Specifically, the Supreme Court found that the plaintiffs do not have legal standing to challenge the individual mandate because they could not show that the $0.00 individual mandate penalty has or would cause an injury to the plaintiffs.

Absent another judicial challenge to the law, which seems unlikely, this decision should ensure the short-term survival of the law, likely for the remainder of the Biden administration.  Since the ACA was not bipartisan legislation, future legislative challenges to the law are probable. It will be interesting to see how the decision impacts future health care reform efforts.  For instance, will the survival of the ACA make Democrats less likely to pursue more sweeping health care reform?

Blue Cross Blue Shield Settlement. Blue Cross Blue Shield (BCBS) has agreed to a proposed settlement of a class action suit against BCBS alleging violation of anti-trust laws with respect to health coverage offered under certain fully insured products and self-funded ASO contracts between 2008 and 2020. Employers covered by the class (employers sponsoring BCBS insured plans between Feb. 7, 2008 and Oct. 16, 2020 or self-funded BCBS plans between Sept. 1, 2015 and Oct. 16, 2020) should understand the impact of the litigation, both because of the employer/plan’s interest in the settlement as well to answer questions from employees and former employees who receive notice of the settlement.

The proposed settlement would have BCBS pay roughly $2.7 Billion, with approximately $1.9 Billion being paid out to members of the class, among other equitable relief. Importantly, employers and employees who were covered by the underlying plans have separate rights to participate in the settlement.  To participate in the settlement proceeds, employers and employees covered by the underlying plans must affirmatively elect to participate in the class by Nov. 5, 2021.  In general, the amount each class member stands to receive under the settlement depends on the amount of premiums/administrative fees that each class member paid relative the rest of the participating class. In submitting claims, employers/plans have the option of including plan specific information with the claim (premium amounts paid, the proportion split between the employer and employee) or relying on default assumptions under the proposed settlement.

Recommended next steps for employers:

  • Determine if the employer is eligible to participate in the settlement and other relief.
  • If eligible, determine the potential value of the settlement (both settlement proceeds and other relief).
  • If the settlement dollars are worth pursing:
    • evaluate whether default assumptions or plan-specific information will be used under the claim;
    • submit the claim; and
    • determine how settlement proceeds will be used (i.e., whether the proceeds are plan assets and whether plan amendments are necessary or advisable).

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Holland & Hart - The Benefits Dial | Attorney Advertising

Written by:

Holland & Hart - The Benefits Dial

Holland & Hart - The Benefits Dial on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.