A federal judge has granted preliminary approval to Elevance Health’s $12.9 million settlement resolving a class action lawsuit that accused the insurer of improperly denying coverage for residential treatment of mental health and substance use disorders.
The lawsuit was originally filed in April 2020 and alleged that the company (then Anthem) used overly restrictive medical necessity guidelines as a third-party administrator when evaluating requests for residential treatment for children. The class was certified in March 2024.
In June, Anthem placed $12.9 million into a common fund as part of the settlement, with nearly 19,000 class members eligible for reimbursement. All class members will receive at least $100, while lead plaintiffs will receive $10,000 each as incentive awards. Anthem also agreed to cover plaintiffs’ legal fees, capped at $4.3 million
The settlement resolves claims under the Employee Retirement Income Security Act and the Mental Health Parity and Addiction Equity Act, and Anthem did not admit to any wrongdoing. A final fairness hearing is scheduled for Jan. 26.
