Cigna Out-of-Network Misclassification Settlement: $1.07M

Individuals who were covered by health benefits through a LocalPlus plan administered by Cigna and who underwent treatment and received an Explanation of Benefits indicating the provider was in-network—when they were actually out-of-network due to a configuration error in Cigna’s system.

Class members must submit a balance bill, including any interest, penalties, or debt collection fees incurred. Alternatively, they may submit a signed affirmation that they will use the payment solely to satisfy the balance bill.

Cigna Health and Life Insurance Co. has agreed to a $1.07 million class action lawsuit settlement to resolve claims it misclassified out-of-network providers as in-network on Explanation of Benefits documents. The alleged misclassification led to patients being billed for charges they were led to believe would be covered under their plans.

The lawsuit focuses on individuals enrolled in LocalPlus plans, which are managed by Cigna. Plaintiffs claimed the company’s benefits system was misconfigured, causing patients to mistakenly think they were receiving care from in-network providers. As a result, they were subjected to balance billing—charges from providers for amounts not covered by the insurance plan.

Cigna denies all wrongdoing but agreed to the settlement to resolve the claims and avoid further litigation.

To qualify for a cash payment, class members must show they received a balance bill specifically because of this misclassification. These payments are separate from standard cost-sharing responsibilities like copays or deductibles.

If the total amount of valid claims submitted exceeds $300,000, the fund will be distributed on a pro rata basis, meaning each class member would receive a proportional share rather than full reimbursement of their balance bill.