Blue Cross Blue Shield Settlement Notice

April 29, 2021

Updated July 29, 2021.

The Board of Pensions has been following a class action lawsuit involving Blue Cross Blue Shield (BCBS).

Members of the Benefits Plan of the Presbyterian Church (U.S.A.) may receive, or have already received, emails from BCBS titled Blue Cross Blue Shield Settlement Notice, regarding this lawsuit. This is a legitimate lawsuit with a settlement that received preliminary court approval in October 2020.

What are we doing?

The Medical Plan of the Benefits Plan is a proposed member of the self-funded plan class and eligible to share in a small portion of the settlement proceeds. The Board has consulted with legal counsel to understand the effect of the settlement on the agency and on individual Medical Plan members. (Medicare Supplement Plan subscribers are not parties in the lawsuit.)

Based on the Board’s review, it is opting out as a class member of the proposed settlement agreement. The relief provided in the agreement does not adequately preserve the Board’s right to seek competitive bids for future claims administration contracts with BCBS companies and licensees. Further, the damages the plan would receive under the settlement are inadequate.

Does the Board’s decision to opt out affect a plan member’s right to recover under the settlement?

No. A plan member may still file a claim. The Blue Cross Blue Shield Settlement website provides directions on the process and the filing deadline (November 5, 2021).

The class action settlement administrator states that plan members who contributed toward the costs of their Medical Plan coverage during the claims period (2015-2020) are eligible for damages under the settlement if they file a claim. The Board cannot determine the exact amount of a member’s claim because it is not based on the amount a member contributed for coverage. Members would be paid a percent of their contribution for the administrative fees paid by the plan. The settlement administrator describes the proposed damage formula for a member’s recovery:

The Self-Funded Default Option allocation is: (1) 18% of an employee’s administrative fee for single coverage is deemed to have been paid by the employee (with the reminder to the employer); and (2) 25% of an employee’s administrative fee for family coverage is deemed to have been paid by the employee (with the reminder to the employer). The Alternative option allows the claimant to submit data or records supporting a contribution higher than the Default.

If the value of a claim is less than $5, no damages will be paid to the claimant. If a member’s coverage was noncontributory (e.g., as with Pastor’s Participation or the former Traditional Program), there is no basis for a claim. As noted earlier, subscribers to the Medicare Supplement Plan are not parties in the lawsuit and so not eligible to file a claim.

The proposed settlement must be approved by the federal district court handling the lawsuit. A hearing on the proposed settlement is scheduled October 20, 2021.

Are Medical Plan benefits affected?

No. The settlement does not affect member benefits under the Medical Plan.