Background-Status of Settlement-Deadline for Filing Settlement Claims
The Settlement arises out of an anti-trust case against Blue Cross and its member plans (such as Anthem) where it was alleged that the various Blue Cross member plans agreed not to compete among themselves, thereby increasing the cost of insurance coverage and administrative services for self-insured plans such as LAFRA. The case settled for $2.67 billion in March 2021 with preliminary court approval. Members who had coverage with Anthem Blue Cross between September 1, 2015 and October 16, 2020 are eligible to apply for a settlement. Claims must be filed with the Settlement Administrator (JND Legal Administration) by November 5, 2021.
Settlement Claims-Member Options for Allocation Between LAFRA and Members
The Settlement, as approved by the Court, provides the following options for allocating a Settlement distribution for self-insured plans:
“Default Option” – Simple
The “Default” Option consists of the following allocation of the amount payable to LAFRA: (1) 18% of a member’s administrative fee for single coverage and 25% of a member’s administrative fee for family coverage is deemed to have been paid by the member (with the remainder to the employer). The member does not have to submit information on the actual percent of administrative fee contributed by the member. Rather, the member only has to indicate the period of Anthem coverage between September 1, 2015 and October 16, 2020 to receive the applicable 18% or 25% share of the employer’s distribution.
“Alternative Option” – Complicated
Under the Alternative Option, the allocation is based on the information that the member must provide on the actual percentage of the administrative fee the member contributed from 2015-2020 on a yearly basis.
Why the Default Option is better for most LAFRA Members
Because the majority of LAFRA’s members contribute less than 18% for single coverage and 25% for family coverage, those members will receive more under the Default Option than an Alternative Option. Thus, the Alternative Option should only be used by members who contribute more than 18% for single coverage and 25% for family coverage.
With respect to those LAFRA members contributing more than 18% or 25% and who do not want to use the simple Default Option, LAFRA can provide these members with administrative support in seeking the required information.
Tax Issues
The Settlement Agreement does not address whether distributions received by members will be taxable income. While the IRS has not addressed this issue specifically regarding the Settlement, prior IRS guidance suggests it may be taxable to Members.
Questions
If you have questions about filing a claim contact JND Legal Administration at info@BCBSsettlement.com or 888-681-1142 or visit BCBSsettlement.com where there is a sample Claim Form (“Important Documents”). If you have questions regarding your LAFRA medical coverage, contact LAFRA at 323-259-5223.
