United Health Plans “Cross-Plan Offsetting” ERISA Class Action

Healthcare plans are governed by a law popularly known as ERISA, the Employee Retirement Income Security Act. This class action brings suit against a number of companies in the United Health group for something called “cross-plan offsetting,” in which the companies use the assets of one plan to offset losses in another.

The class for this action is all participants and beneficiaries of ERISA-governed employee welfare benefit plans administered by United where plan benefits were taken, in whole or in part, by United, to offset a purported debt owed to a separate plan, between July 14, 2014 and final judgment in this case.

The defendants in this case include UnitedHealth Group, Inc., United HealthCare Services, Inc., United HealthCare Insurance Company, and United HealthCare Services, LLC. United administers and offers insurance for healthcare plans, such as employer group plans.

The complaint alleges, “United treats the thousands of Plans it administers as one extremely large piggybank, moving more than $1.2 billion among its Plans each year to suit its own interests.” This violates ERISA, the complaint claims, “and in most cases, the money ends up in United’s own pocket.”

According to the complaint, the cross-plan offsetting involves seizing money from plans and using them “for its own non-Plan purposes.”

How does the cross-plan offsetting work? United has two kinds of plans, self-insured and fully-insured. The complaint says, “Self-insured plans fund their own claim payments with money from the Plan sponsor (i.e., the employer) and contributions from Plan participants as required.” They have bank accounts used to pay for benefits and reasonable administrative costs. On the other hand, “United pays fully-insured claims with money from one or more insurance subsidiaries.”

United acts as a third-party administrator for self-insured plans and an administrator for fully-insured plans. As administrator, United accepts bills submitted by providers who gave plan participants services, determines if the services were covered, and pays the providers.

Cross-plan offsetting takes place when United decides that it paid a provider in error or paid too much to the provider and tries to get the provider to repay it. If the provider does not agree with United, the complaint says, “United unilaterally withholds partial or entire payments unquestionably owed to the provider for providing covered services to different Plan participants covered under different Plans. This is cross-plan offsetting.”

Such actions are a problem for participants in that they make them potentially liable for “balance billing,” that is, for paying for the portion of their bills that United should have paid but that it is withholding as an overpayment of another person’s bill with the same provider.

The complaint alleges that United used cross-plan offsetting to seize over a billion dollars in plan assets in 2018.

According to the complaint, United has breached its fiduciary to plan participants in a number of ways and engaged in transactions prohibited by ERISA, among other things.

Article Type: Lawsuit
Topic: Insurance

Most Recent Case Event

United Health Plans “Cross-Plan Offsetting” ERISA Complaint

July 14, 2020

Healthcare plans are governed by a law popularly known as ERISA, the Employee Retirement Income Security Act. This class action brings suit against a number of companies in the United Health group for something called “cross-plan offsetting,” in which the companies use the assets of one plan to offset losses in another.

United Health Plans “Cross-Plan Offsetting” ERISA Complaint

Case Event History

United Health Plans “Cross-Plan Offsetting” ERISA Complaint

July 14, 2020

Healthcare plans are governed by a law popularly known as ERISA, the Employee Retirement Income Security Act. This class action brings suit against a number of companies in the United Health group for something called “cross-plan offsetting,” in which the companies use the assets of one plan to offset losses in another.

United Health Plans “Cross-Plan Offsetting” ERISA Complaint
Tags: Breach of Fiduciary Duty, ERISA Violations, Health Insurance, Insurance, Prohibited Transactions, Refusal to Pay, Unfair Offsetting