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Cigna Health and Life Insurance Company recently agreed to settle a proposed class action lawsuit following mediation. Plan participants claimed in the suit that Cigna violated the Employee Retirement Income Security Act (ERISA) when it advertised to plan participants certain providers as in-network who were in fact out-of-network. 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.
Cigna and the proposed class of Cigna health plan participants filed a joint status report advising the court that they had settled the case. They advised that they were working on details to finalize the settlement and draft a motion for preliminary approval of the settlement, which the proposed class intends to file by September 19, 2025.
The health plan participants initially sued in July 2024 on behalf of current and former participants in Cigna-administered employee benefits plans. The participants alleged in their suit that their employer was maintaining so-called “ghost networks” concerning their health plan coverage. Ghost networks refer to inaccurate insurance provider directories – in this case, providers listed as in-network, although they were out-of-network.
The proposed class then amended its complaint in March. In their amended complaint, they claimed that the incorrect communications about in-network coverage violated ERISA by disregarding the terms of their employee benefit plans. They also alleged that Cigna breached fiduciary duties of care and loyalty.
The settlement comes following the dismissal of some of the proposed class's claims in May. The judge granted Cigna's motion to dismiss in part and denied it in part. The judge dismissed claims that Cigna withheld benefits under the individual healthcare plan and that the provider network miscommunication breached plan terms. However, the judge denied a request to dismiss the claim for breach of fiduciary duty, stating that the amended complaint contained allegations sufficient to support the claim.
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