Cigna Health and Life Insurance Co. has offered to settle a proposed class action lawsuit for $5.7 million. The case is Hecht et al. v. The Cigna Group, case number 1:24-cv-05926, U.S. District Court for the Northern District of Illinois.
The plaintiffs accused Cigna of violating the Employee Retirement Income Security Act (ERISA) by advertising out-of-network healthcare providers to plan participants as in-network providers.
Under the terms of the settlement, Cigna would establish a constructive common fund for class members. About $4.6 million of the settlement amount would go toward injunctive relief for claims that Cigna improperly categorized as in-network. Cigna agreed not to reprocess the affected claims as out-of-network claims.
The suit originally involved various claims related to so-called “ghost networks” of providers that Cigna maintained in its employee benefit plans. The federal district court judge handling the case dismissed a claim for benefits due under ERISA for failure to state a claim. The sole remaining claim at the time of settlement was for breach of fiduciary duty under ERISA.
HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.
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