BCBSIL Settlement Important Alert

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Are you a current or former BCBS Customer?  Have you heard about the recent BCBS Settlement – either in the news, or maybe you or your employees have received a notice in the mail or email?  In either case, please read on…

What You Need to Know: 

In October 2020, the BCBS companies reached a settlement on a lawsuit dating back to 2012, so now most BCBS “customers” (both groups and individuals) who paid BCBS premium from 2008–2020 are entitled to be part of the class action lawsuit.

Since almost all BCBS groups share premiums between employers and employees, both employers and employees will need to choose whether they want to be part of the payout’s settlement or pursue legal action on their own.  There are deadlines in both July and November. 

While it is nearly impossible to determine how much employers and employees will receive as their slice of the over $1.9 billion pie, everyone will need to determine their own course of action. (Note, this amount is net of the $2.67B settlement, after attorney and administrator fees.)  The settlement will be divided with 93.5% being applied to individual and fully-insured plans, and 6.5% to self-funded plans. 

The Court has appointed JND Legal Administration to administer the settlement claims, and JND has set up a website: www.bcbssettlement.com. JND is in the process of sending out individual, personalized notices to impacted members with a claim number to start their claim. If a member feels they did not properly receive a notice, they too can apply on the site or email info@BCBSsettlement.com to be added.

What You Need to Do as Employer: 

  1. Read the attached fact sheet from the BCBS Association and/or learn more at www.bcbssettlement.com
  2. Determine if you are eligible to be part of the claim process. If you are a non-government entity that was Fully insured with BCBS between 2/7/08 and 10/16/20 (or Self-funded with BCBS between 9/1/15 and 10/16/20), you may be eligible to receive payment.  Watch your mail or email for a notice, or contact JND at info@BCBSsettlement.com to be added.
  3. Discuss with your legal counsel and determine whether to stay in the class action lawsuit or opt out.  Since pending litigation (and the related settlement funds) is a legal issue, Stumm Insurance cannot serve as your legal counsel. It is our guess that it would not make sense for an employer to try to pursue legal action on its own, but ultimately, we defer to your legal counsel. The “opt out” deadline is 7/28/21.
  4. (If you choose to move forward with the class action settlement) Determine if you want to file on your own or utilize a “settlement assistance” vendor.  There are many vendors offering to help with this, but keep in mind they will typically keep 20-33% of what they/you recover. 
  5. (If you want to file on your own) Follow the instructions below under “If You Choose to File a Claim”.  The claim filing deadline is 11/5/21. 
  6. Be careful about making recommendations to your employees & former employees about how they should proceed.  Any input could be interpreted as legal advice.  Here is a suggested Email to send to your Employees:

Dear Employees:

If you were enrolled in our group health plan during [insert time when BCBS was your insurer between 2/7/08 and 10/16/20], you may be receiving (or you may have already received) a notice in the mail about filing a claim under a class action settlement with BlueCross BlueShield.  We encourage you to carefully review the materials you receive. 

In the meantime, you may want to review the materials on the settlement website at www.bcbssettlement.com.  

If you did not receive a settlement notice, and want to ensure you receive one, you can register your email address on the website. 

If You (or Your Employees) Choose to File a Claim

If you have received a notice with a Unique ID, go to www.bcbssettlement.com and follow instructions to file a claim online.  It is recommended to file your claim with the Unique ID, as it should simplify the payment process.  If you have not receive a notice yet, you can continue to wait, or email info@BCBSsettlement.com to be added.

 There are 5 parts to the Online Claim Form:

  1. Business Info – includes Name & Address, as well as Contact Name, Phone & Email
  2. Health Plan Details – you will need Insurance carrier, Group#, Coverage Start & End Date, and answer to the Purchasing Entity question (most Stumm Clients will be “No”)
  3. Allocation of Premiums – choose Default or Alternative – See Below*
  4. Payment Election – choose Check, Pre-Paid Card, Venmo, or PayPal
  5. Review & Signature 

You can also download the Paper Claim Form from the site under “Important Documents”.  The sections include:

Part A: completed by Employer

Part B: only completed by people with individual policies – employers can skip

Part C: completed by Employee

Part D: only completed if using the Alternative method of recovery

Part E&F: Payment election & signature 

Note, payments will not be made until 2022.  Also, any payments will be taxable, but it does not appear that a 1099 will be issued, so you’ll be on your own to account for the payment. 

Allocation of Premium – Default or Alternative? 

If members choose to make their own claim, then the plan’s share of the settlement pie is split into per-member slices, and the slice for any individual claimant is then split between the employer and the claimant based on either an assumed (default method) or demonstrated (alternative method) premium split. For example, if ABC Company premiums paid entitled them to $X of a settlement, and they pay 80% of premiums, then they would conceivably receive 80% of X, and the employees would share 20% of X.   For any member who does not make a claim, the employer keeps the entire per-member slice. 

In the claim filing process, you will need to choose one of two methods: 

  • Default Method (easier; equivalent to “take the money and run”)
  • Alt Method (more complex; employer and employee will need to provide employer/employees percentages with supporting data from payroll systems)

For fully-insured plans, the Default method assumes employers paid 85% and employees paid 15% of the total cost of single coverage; and for family, employers paid 66% and employees paid 34%.  So if an employer paid HIGHER percentages, it should consider whether it wants to file under the alternative method to conceivably recover a higher payment.

For self-funded plans, the Default method assumes employers paid 82% and employees paid 18% of the total cost of single coverage; and for family, employers paid 75% and employees paid 25%.  So if an employer paid HIGHER percentages, it should consider whether it wants to file under the alternative method to conceivably recover a higher payment.  

We hope you find this a thorough explanation of the process.  

If you have additional questions, please reach out to a member of your Stumm Insurance team.