Lawsuit challenges Aetna’s long-term disability reimbursement strategy
A Pennsylvania woman has filed a proposed class action against Aetna Life Insurance, alleging the insurer continuously and systemically demanded individuals on long-term disability repay Aetna once they recover from their injuries.
The updated lawsuit, filed in U.S. District Court for the Middle District of Pennsylvania on Monday, comes from Joanne Wolff, who was covered under a fully insured Aetna group plan through her employer, Bank of America.
Wolff was temporarily disabled in a motor vehicle crash in September 2015, and shortly after submitted a claim for long-term disability benefits to Aetna. The insurer paid about $50,150 in benefits, although the Hartford, Connecticut-based insurer later demanded a portion of the money back once Wolff regained her health.
Bank of America employees have been good for Aetna Life Insurance’s business. In 2016, Aetna collected approximately $68 million in disability insurance premiums from Bank of America, or 7% of its $957 million total that year, according to the lawsuit.
Two years ago, Wolff filed a complaint questioning the legality of Aetna’s reimbursement order. On Monday, she asked the court to expand the reach of her complaint to represent at least 53 other Bank of America employees who’d used their Aetna disability benefits. The plaintiff estimates that hundreds of Aetna customers will likely join the suit because the company allegedly violated the federal Employee Retirement Income Security Act, also known as ERISA.
The lawsuit claims that Aetna offered a standard group disability policy that does not allow it to require policyholders to reimburse them.
Aetna, which did not respond to an interview request, sold its group life and disability insurance businesses to property-casualty insurer the Hartford Group in 2017 for $1.45 billion. CVS Health acquired Aetna’s health insurance operations in 2019.