ERISA Class Action Lawsuit Claims Cigna Overcharged Members

May 22, 2023
Hall Benefits Law, LLC

Cigna Health and Life Insurance Co. is facing an ERISA class action lawsuit in Connecticut District Court, in which proposed class members alleged that the insurance company is overcharging for medical services. Although Cigna claims that it negotiates with in-network providers for lower rates to help their insureds save money, the proposed class members claim that Cigna engaged in a fraudulent scheme and that they did not save money as promised but instead faced excessive charges.

For instance, the plaintiff in the suit, Audrey Srednicki, obtained a blood test from LabCorp, an in-network lab. She later discovered that the uninsured cash price for the test was much less than what she paid. Specifically, on her Explanation of Benefits, Cigna identified the provider as “HLTH DIAG LAB” rather than LabCorp and the amount billed was $17,462.66. Meanwhile, the cash price for an uninsured patient to get a blood test at LabCorp was $449.00.

Cigna provided a “discount” of $14,572.66, leaving a balance of $2,787. The plan covered $471.02 of that balance, leaving Srednicki responsible for $2,315.98 in deductible and coinsurance payments. Cigna paid LabCorp, in full, with the $471.02 it paid. Cigna then, allegedly, used “HLTH DIAG LAB,” a d/b/a pseudonym for Cigna Healthcare of Arizona, Inc., to create a fake invoice for the “balance” of $2,315.98, payable to Cigna Medical Group.

Due to these allegations, the proposed class members claim that Cigna, as a fiduciary of their plans under ERISA, breached the terms of their ERISA plans and their legal obligations. They also claim that Cigna breached its fiduciary duty and engaged in prohibited transactions, harming the proposed class members.

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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Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.

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