Blue Cross Blue Shield Class Action Lawsuit

After several years of litigation, the Blue Cross and Blue Shield companies (BCBS) agreed to settle a legal dispute challenging elements of the BCBS Association licensing agreements.

In the settlement, reached on October 30, 2020, BCBS did not admit fault, but they did agree to make operational changes as well as to provide payment to members of the class involved in the case. The settlement amount is $2.67 billion.

Who are potential class members?

Potential members of the class include the following groups to the extent they were covered by a BCBS health policy during the covered period:

Individuals and insured group health plans between February 8, 2008 and October 16, 2020.
Self-funded plans between September 1, 2015 and October 16, 2020.

Sharing the Settlement with Employees

Q: If an employer group health plan receives a settlement amount, will it be necessary to share the proceeds of the settlement with employees?

A: Yes, to the extent that employees participated in the payment of premiums for the coverage. Any settlement proceeds will be considered plan assets, and, as such, employers should expect to share the proceeds with employees to the extent that employees contributed to the plan (via contributions). While no specific guidance has been provided to date, it is reasonable to assume that employers will be able to rely on other plan rebate guidance (such as for MLR rebates) in calculating shared proceeds.

How will I be notified?

Potential Class Members will receive a formal notification via mail or email. It is also possible to opt into the lawsuit as a member via the link on the settlement website www.BCBSsettlement.com.

How much money might an individual or employer receive?

The final calculation will be based on the number of respondents that join the lawsuit as class members. Sample calculations for individuals and employers are listed below.

Example for Individuals:

158,000,000: People covered by Employer sponsored plans. This rough analysis does not include individual plans or ASO plans. (Source: Kaiser Family Foundation)
2,666,667: People covered by a BCBS plan (1 in 3)
$2,677,000,000: Total settlement amount
$1,900,000,000: Expected approximate distributable settlement (those who submit a valid, timely claim)
$146,154,000: Approximate award per year of coverage (13 years)
$2.78: Total award per year / Total people covered per year*

*Assuming all group health plan claimants file, but not considering individual plans or ASO contracts. Adding these elements would further reduce the total award per year per person covered.

Example for Employer Plan

100: Employees
$278: For employer per year
5: Years of coverage
$1,387: Potential total award

Dilute for Employee Contribution

If employees contributed to health plan via contributions, settlement proceeds would need to be passed through to plan participants.

Enhance If Less Than 100% of Claimants Join Lawsuit

Unweighted average claimants per class action suit = 21%
Unweighted medium claimants per class action suit = 8%
However, most potential class members in class action lawsuits are simply just letter or postcard. This suit is a very high profile one with lots of media coverage. Also, the bulk is employer based, so single employers will be collecting for groups of employees. Add to that the reality that essentially all large plans with significant potential settlements will certainly file, thus bringing up the both the average and the medium numbers. Thus, it is expected that a significantly higher than average number of claimants will file. This means that the potential award per employee per year will likely remain low (because we can assume that essentially all large stakeholders will join).

These numbers are for example use only. It is important to realize that the actual final settlements will be calculated based on actual premium volume, not on number of covered lives.

Do I need an attorney or a firm for representation?

It is important to be aware that you do not need to retain the services of such a law firm in order to receive a potential benefit. You can “go direct” (as most class members do) and simply register as a member of the Class Action group directly on the formal website.

Important Dates

Spring 2021: Formal notices sent
July 28, 2021: Deadline to Opt Out of Class Action Suit
November 5, 2021: Deadline to file to participate in the Class Action Suit

Unique IDs

If you receive a formal notification, look for the Unique ID. While it is not absolutely necessary, having the Unique ID will make it easier to file a claim.

Postcard Notice looks like this:

Email Notice looks like this:

Formal References

Formal resources for the class action lawsuit can be found below. The website includes Frequently Asked Questions, important reference documents, and a link to file a claim.