Anthem Blue Cross has agreed to refund $8.3 million to tens of thousands of its members in California to settle a class-action lawsuit over mid-year changes to its health plans, the Los Angeles Times reports (Masunaga, Los Angeles Times, 10/27).

Background

In mid-2011, the insurer increased annual deductibles, out-of-pocket limits and prescription drug deductibles for about 50,000 policyholders.

In response, two lawsuits were filed against Anthem alleging breach of contract. The two cases later were combined into one class-action lawsuit.

Anthem argued that mid-year increases were allowed under its contracts with proper notice (Plevin, "KPCC News," KPCC, 10/27).

Details of Settlement

The average settlement that policyholders will receive is $167, according to Jerry Flanagan, a lawyer with Consumer Watchdog, which was involved in the lawsuit. However, one policyholder will receive $19,000 from the settlement.

The insurer also will have to pay Consumer Watchdog and another law firm $1.76 million in legal fees.

In addition, Anthem agreed not to make mid-year changes to deductibles, copays or other costs in the future (Seipel, San Jose Mercury News, 10/27).

Anthem did not admit wrongdoing under the settlement, but settled to avoid "further expense" related to the lawsuit. Anthem spokesperson Darrel Ng said the insurer is "pleased that all parties were able to come to an agreement" (Los Angeles Times, 10/27).

Policyholders will not be required to file claims to receive their portion of the settlement (Rauber, "Bay Area BizTalk," San Francisco Business Times, 10/27). Checks are expected to be mailed in December, Consumer Watchdog said.

The settlement still must be approved by Los Angeles County Superior Court Judge Jane Johnson ("KPCC News," KPCC, 10/27).