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Blue Cross Blue Shield Antitrust Settlement - Engaging with Settlement Vendors

Since 2012, the Blue Cross Blue Shield Association has been involved ina class action lawsuit pertaining to their alleged national anti-competitive policies.

The lawsuit claimed they violated antitrust law through splitting insurance markets in order to avoid competition among its member companies. It is a complicated suit. After years of litigation, a tentative settlement was reached with Blue Cross Blue Shield agreeing to a $2.67 billion settlement fund to pay settlement class members. In addition, BCBS agreed to put in reforms to increase competition amongst its member companies. The eligible class members (plaintiffs) include fully insured who had a Blue-Branded healthcare policy between 2008 and 2020 and self-insured employers who had a Blue-Branded healthcare policy between 2015 and 2020. The number of entities that potentially qualify is substantial, so the proceeds in this settlement are expected to be spread broadly.

Recently, we have been receiving significant outreach from our clients regarding the emergence of “settlement vendors” soliciting plan sponsors for the rights to represent them in filing a BCBS settlement claim in exchange for a contingency fee.

Our clients have been inquiring whether we feel it is necessary for plan sponsors to partner with a third-party to handle their settlement claim. While we cannot provide legal advice, here are some considerations plan sponsors should weigh in assessing whether engaging with a third-party to handle their settlement claims is necessary:

  1. Generally, courts approving a class action settlement require the claims process that class members must follow to be as simple as possible. Courts will usually hesitate to approve a settlement where class members would require the assistance of a third-party to file a settlement claim. In fact, the BCBS Antitrust website (bcbssettlement.com) states the following:

    Notice will be provided to class members in the spring of 2021, at which point all eligible class members will be able to easily file a claim online at this website to recover from this settlement.

  2. The settlement has not yet been approved, and as of now, the only action a class member can take is registering to receive notice when the settlement is approved (most likely at some point in the spring). The BCBS Antitrust website states the following:

    There is no need to do anything at this time as the Claims Period has not yet begun. Direct Notice will be mailed or emailed to all Damages Class Members for whom the Claims Administrator has contact information. However, if you are concerned that your name may not be included in those records and you want to receive notification of the claims period opening, you may register by providing your email to us now. The Notice will make clear all of your legal rights and options.

  3. It is unclear whether settlement amounts will be significant for class members. We know that the potential number of plan sponsors across the country could be massive, so whether it makes sense to share settlement amounts with a third-party is to be seen. The picture will become clearer as we start to see payouts.

We will continue to monitor developments in the BCBS Settlement (including continuing conversations with all of our BCBS carrier partners), and will provide our clients with updates as they become available. If you have any questions in the meantime, please reach out to your local OneDigital advisory team.

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