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Special Master Probing Delays in Health Net Class Settlement Payout

December 31, 2013

New Jersey Law Journal
By Mary Pat Gallagher

Administration of a $215 million class action settlement with a health insurer is under a microscope as a special master investigates delays in payments to class members.

U.S. District Judge Faith Hochberg in Newark appointed Paul Zoubek to look into why $90 million in funds had yet to be paid to the class almost five years after the settlement in Wachtel v. Health Net Inc.

The settlement of three consolidated suits dating back to 2001, approved in August 2008, resolved claims on behalf of more than 2.5 million Health Net insureds that the company under reimbursed for out of network medical care. It was, in Hochberg’s words, “among the largest ERISA health insurance settlements on record.”

Zoubek, of Montgomery McCracken Walker & Rhoads in Cherry Hill, was instructed to examine how the settlement has been administered and whether Health Net ‘s rejection of claims against the settlement fund was legitimate and in good faith, in part conducting a statistical sampling of claims that were denied.

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