A pair of workers enrolled in a UnitedHealthcare insurance plan have filed a class-action suit claiming the healthcare giant took more than $1 billion annually from employer plans for "cross-plan offsetting."
The practice, which has been challenged in court before, takes funds paid by employer plans to cover payment disputes with physicians. The plaintiffs aim to block UnitedHealth from continuing to use cross-plan offsetting "for good."
The plaintiffs in the latest case argue that the practice has been deemed illegal under the Employee Retirement Income Security Act of 1974 (ERISA) by several courts and has come under fire from the Department of Labor.
“UnitedHealth Group treats all of the plans it administers as one huge piggybank, moving money around as it sees fit,” said Karen Handorf, a partner at Cohen Milstein Sellers & Toll, head of the firm’s ERISA/Employee Benefits practice and lead counsel in the suit, in a statement.
“That kind of mixing of plan assets is incompatible with United’s fiduciary duties to each of its separate plans and runs afoul of ERISA at every turn," Handorf said.
The plaintiffs call for the insurer to use funds brought in by a specific plan to "solely and exclusively" cover the benefits for that plan.
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