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Cigna Health and Life Insurance Co. has offered to settle a proposed class action lawsuit for $5.7 million. The case is Hecht et al. v. The Cigna Group, case number 1:24-cv-05926, U.S. District Court for the Northern District of Illinois.
The plaintiffs accused Cigna of violating the Employee Retirement Income Security Act (ERISA) by advertising out-of-network healthcare providers to plan participants as in-network providers.
Under the terms of the settlement, Cigna would establish a constructive common fund for class members. About $4.6 million of the settlement amount would go toward injunctive relief for claims that Cigna improperly categorized as in-network. Cigna agreed not to reprocess the affected claims as out-of-network claims.
The suit originally involved various claims related to so-called "ghost networks" of providers that Cigna maintained in its employee benefit plans. The federal district court judge handling the case dismissed a claim for benefits due under ERISA for failure to state a claim. The sole remaining claim at the time of settlement was for breach of fiduciary duty under ERISA.
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