an equal and opposite reaction
Case Details for "Health Net"
Health Net agrees to settle class action lawsuits
Health Net has agreed to pay as much as $14 million to settle lawsuits brought on behalf of 800 former policyholders whose coverage was dropped after they submitted substantial medical bills. According to the settlement individuals whose health insurance policies were canceled since 2004 are eligible for payments of up to $218,000. The average payment is expected to be $7,836.
In addition to the payments to customers, it requires Health Net to pay a fine of $2 million to the city attorney and to contribute $500,000 to charities. Shernoff's firm will earn $2.1 million.
It follows a two-year crackdown by state regulators on the widespread and controversial practice known as rescission. In deals with regulators, insurance providers Health Net, Anthem Blue Cross and Blue Shield all have agreed to make substantial changes in the way they sell individual coverage in an effort to reduce the number of rescissions.
In all, Health Net has agreed to pay more than $40 million to resolve the regulatory actions and litigation over rescission.
The Health Net agreement includes provisions that parallel earlier settlements with regulators, including an offer to extend coverage to the affected consumers without regard to preexisting conditions.
It also requires Health Net to reimburse medical expenses paid out of pocket by former policyholders after they were rescinded.
In addition, Health Net agreed to extend its self-imposed moratorium on rescissions until lawmakers or regulators establish standards for them -- or until the company establishes a third-party review process that is acceptable to the judge overseeing the case.
Posted on:2009-02-12
Company: Health Net
Class: Unknown
Scope: Nationwide
Type of Case: Consumer
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