Union Suit Against Insurer May Be ‘Tip of the Iceberg’ Amid Plan Sponsor Discontent
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Dec 16, 2022
If a new lawsuit filed by two Connecticut union locals against Elevance Health, Inc. is successful, health insurers managing self-funded plans could face a torrent of litigation from unhappy plan sponsors. Plan sponsor trade groups and the attorneys handling the Connecticut lawsuit argue that carriers across the country systematically overcharge administrative services only (ASO) plan sponsors for procedures — and that newly available price transparency data proves it.
The Connecticut lawsuit alleges that Elevance, the company formerly known as Anthem (which still sells plans under that brand name), charged excessive fees for some procedures or negotiated kickbacks with providers in its network. Attorneys for the union locals — International Union of Bricklayers and Allied Craftworkers Local 1 and Sheet Metal Workers’ Local No. 40 — accuse Elevance of “either unlawfully retaining…improperly discounted amounts for itself, or…imprudently overpaying providers. Either way, [Elevance] is in breach of its fiduciary obligations to the Plans” under the Employee Retirement Income Security Act (ERISA), the suit argues.
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