Health Republic Insurance Company v. United States
Health Republic Insurance Company Risk Corridors Class Action
Case No. 16-cv-00259-MMS

Frequently Asked Questions

 

Expand/Collapse All
  • You were mailed the notice because government records show that you offered one or more Qualified Health Plans ("QHPs") under the Patient Protection and Affordable Care Act ("Affordable Care Act") in the 2014 and/or 2015 benefit years, and that your allowable costs in either the 2014 or 2015 benefit years, as calculated by the Centers for Medicare and Medicaid Services, were more than 103 percent of your target amounts (as those terms are defined in the Affordable Care Act).

    The purpose of the notice is to inform you of a class action lawsuit regarding unpaid risk corridor amounts for those two benefit years, to advise you of how your rights may be affected by this lawsuit, and to inform you how you can join or "opt in" to the lawsuit if you choose to do so. The class action lawsuit is called Health Republic Insurance Company v. United States, Case No. 16-259C. This lawsuit is pending in the United States Court of Federal Claims.

  • Plaintiff Health Republic Insurance Company claims that Defendant United States has not fully paid the risk corridors payments for 2014 and 2015 to which it and other insurers such as your organization are entitled under the Affordable Care Act. Section 1342 of the Affordable Care Act established a risk corridors program that applied to insurers who offered QHPs on the Affordable Care Act's insurance exchanges in any of the 2014, 2015, or 2016 plan years. The risk corridors program provided that QHP issuers would receive compensation from the United States if their losses exceeded a certain defined amount due to higher-than-expected utilization and medical costs for the issuer's insureds. At the same time, the risk corridors program provided that QHP issuers would pay the government a percentage of any unexpectedly high profits they made over similarly-defined amounts. During 2014, QHPs collectively incurred almost $2.9 billion in compensable losses under the risk corridors program. Similarly, QHPs also incurred substantial compensable losses in 2015, totaling about $5.8 billion.

    In appropriations acts for 2015 and 2016, Congress prohibited the Centers for Medicare & Medicaid Services ("CMS") and the United States Department of Health & Human Services ("HHS") from making risk corridor payments from funds appropriated under those acts. HHS and CMS adopted a "budget neutral" approach to the program in which only risk corridor collections from QHP issuers would be used to make risk corridor payments out to other QHP issuers. HHS also stated that distributions under the risk corridor program would be reduced pro rata to the extent of any shortfall. As a result of this budget neutral approach (which Plaintiff contends in this lawsuit violates the Affordable Care Act), QHP issuers received only 12.6% of the amounts owed to them under the risk corridors program for the 2014 plan year, representing a $2.5 billion shortfall. Collections from the 2015 plan year were even less, and HHS used collections from that year to pay QHP issuers an additional 1.6% of their owed amounts for the 2014 plan year, meaning that QHP issuers received no risk corridor compensation for the 2015 plan year. Today, the collective shortfall for the 2014 and 2015 plan years stands at approximately $8.3 billion.

    In February 2016, Plaintiff Health Republic Insurance Company filed a class action lawsuit in the United States Court of Federal Claims alleging that, through this "budget neutral" approach to the risk corridors program, the Government violated Section 1342 of the Affordable Care Act and its implementing regulations. Plaintiff claims that the Class is entitled to relief under the Tucker Act, a federal statute that provides the United States Court of Federal Claims with jurisdiction to award money judgments against the federal government where a statute is money-mandating and requires payment. The case was assigned to Judge Margaret M. Sweeney. On January 3, 2017, the Court entered an order granting class certification and appointing Quinn Emanuel Urquhart & Sullivan, LLP as lead counsel for the Class.

    On January 10, 2017, the Court denied the United States' motion to dismiss Plaintiff’s claim for payment under the Affordable Care Act. Specifically, the Court found that it had subject matter jurisdiction over Plaintiff's claim that HHS, by failing to make full risk corridors payments for 2014 and 2015, violated section 1342 of the Affordable Care Act. The Court further found that this claim was ripe for adjudication, and so did not need to wait for some future event before the Class could pursue risk corridor payments from the Government. The Court granted the United States’ motion to dismiss with respect to limited additional relief Plaintiff requested, but this was to relief other than the unpaid risk corridor amounts, including special or consequential damages (on top of the amounts currently owed by statute), declaratory and injunctive relief, and pre-judgment and post-judgment interest.

    More detailed information about this lawsuit is contained in the Class Action Complaint filed in this lawsuit. The Class Action Complaint and the Court's decision on the Government's motion to dismiss are available at the Important Documents page.

  • Health Republic Insurance Company, the Plaintiff who filed this class action, seeks the following on behalf of itself and the Class:

    • Payment from the United States of the full amount of risk corridors payments for the 2014 and 2015 plan years pursuant to section 1342 of the Affordable Care Act and its implementing regulations;
    • Payment to the lawyers who represent Health Republic Insurance Company who filed this lawsuit, as well as their expenses and fees associated with bringing and prosecuting this lawsuit — such payment would be drawn from any judgment, settlement, or other recovery obtained by Health Republic Insurance Company and the class; and
    • The award of any other relief that the Court deems just and proper.
  • In a class action lawsuit, one or more people or entities called "Class Representatives" (in this case Health Republic Insurance Company) sue on behalf of other people or entities who have similar claims. These people or entities together are a "Class” or “Class members." The people or entities who sued—and all the Class Members who join the lawsuit—are called "Plaintiffs." The party or entity against whom the lawsuit is brought is called a "Defendant." Here, the United States is the Defendant, because it is the party ultimately responsible for paying amounts owed under the Affordable Care Act. The Court of Federal Claims will resolve all legal and factual issues for every eligible Class Member who timely submits a Class Action Opt-In Notice Form. Those individuals who did not timely submit a Class Action Opt-In Notice Form will be excluded from the Class in this case.

    More information about why the Court has allowed this lawsuit to be a class action is located in the Court's Order certifying the Class, available at the Important Documents page.

  • You are not part of the Class unless you filled out the Class Action Opt-In Notice Form located at the end of the Notice or at the Electronic Opt-In Submission page. Rule 23 of the Rules of the United States Court of Federal Claims requires that Class Members wishing to participate in this class action must join or "opt-in" to this class action lawsuit. If you fit the description in the next question, you were able to opt-in and join this lawsuit.

    Please note that this "opt-in" procedure is different than many other class action lawsuits in the United States because, if you did nothing, you will not be able to participate in the lawsuit as a Class member.

  • Under the Rules of the United States Court of Federal Claims, the Court has allowed the lawsuit to be a class action on behalf of the following:

    All persons or entities offering Qualified Health Plans under the Patient Protection and Affordable Care Act in the 2014 and 2015 benefit years, and whose allowable costs in either the 2014 or 2015 benefit years, as calculated by the Centers for Medicare and Medicaid Services, were more than 103 percent of their target amounts (as those terms are defined in the Patient Protection and Affordable Care Act). Excluded from the Class are the Defendant and its members, agencies, divisions, departments, and employees.

  • To participate in this lawsuit, and potentially participate in any recovery that may result from this lawsuit, you must have returned the Class Action Opt-In Notice Form electronically via this website, or by mail, courier or facsimile to Class Counsel.

    The Class Action Opt-In Notice Form must have been submitted, faxed, postmarked, or delivered on or before Friday, May 12, 2017.  This deadline has passed.

    If you do not wish to participate in the lawsuit, you need not take any action.

  • If you are eligible to be a Class member and chose to join the Class, you will receive any monetary or other benefits obtained from the lawsuit. A judgment in this case will be binding on you, meaning you could not pursue your own separate lawsuit using your own attorney. Similarly, you may be bound by, and can share in, any settlement reached on behalf of the class. In the event Class Counsel and the United States reach a settlement, you will receive notice of the settlement and you may object to the settlement and be heard by the Court on your objection. In the case of any settlement reached before entry of judgment, Class Counsel may seek to decertify the litigation class and recertify a settlement class, which would allow any Class members that previously opted-in to decide whether to join the settlement class at that time.

    Any person or entity who submitted a Class Action Opt-In Notice Form to join the Class need not appear in Court in order to participate. If you become a Class Member, your interests will be represented by the Class Representative and Class Counsel. Ultimately, the Court will rule on whether you are entitled to compensation and, if so, the amount of compensation owed to you.

    In order to join the Class, you must have submitted a Class Action Opt-In Notice Form by Friday, May 12, 2017. This deadline has passed.

  • You will not have to pay any money out of pocket to participate in the Class Action. If the Class is successful in this litigation, however, Class Counsel will ask the Court's permission to be compensated for litigating this case and representing the successful Class. Any sums received by Class Counsel in compensation will be deducted from any recovery, which will proportionately reduce the amount of any award each Class Member receives. If the case is unsuccessful, you will have no obligation for attorneys' fees or costs.

    Class Counsel represents that it will request no more than 5% of any judgment or settlement obtained for the QHP Issuer Class. The fee may be substantially less than 5% depending upon the level of class participation represented by the final membership of the QHP Issuer Class. In any event, the exact percentage of Class Counsel’s fees will be determined by the Court subject to, among other things, the amount at issue in the case and what is called a “lodestar cross-check” (i.e., a limitation on class counsel fees based on the number of hours actually worked on the case). See, e.g., Geneva Rock Products, Inc. v. United States, 119 Fed. Cl. 581, 595-96 (2015); Loving v. Sec’y of Health and Human Servs., 2016 WL 4098722, at *4 (Fed. Cl. Spec. Mstr. July 7, 2016).

  • If you did not submit a Class Action Opt-In Notice Form electronically, postmarked, faxed, or hand delivered on or before Friday, May 12, 2017, you cannot participate as a Class Member in this case. As a result, you will not receive any money or benefits from the Court as a result of this lawsuit. However, you keep the right to hire your own lawyer or proceed without counsel to sue the United States separately about the same legal claims in this lawsuit and you will not be legally bound by any decision of the Court in this class action.

  • The Court has decided that attorneys at the law firm of Quinn Emanuel Urquhart & Sullivan, LLP, led by partners Stephen Swedlow, J.D. Horton, and Adam Wolfson, are qualified to represent you and all Class Members. Quinn Emanuel Urquhart & Sullivan, LLP is called "Class Counsel." Class Counsel has experience handling this type of lawsuit. More information about Class Counsel is available at: www.quinnemanuel.com.

  • You do not need to hire your own lawyer because Class Counsel will work on your behalf and represent your interests if you joined the Class. You have the right to have your own lawyer. Your own lawyer can appear in court for you if you want someone other than Class Counsel to speak on your behalf. If you choose to hire your own lawyer, you will have to pay that lawyer.

  • If the case is not resolved by a settlement, summary judgment, or otherwise, the Class Counsel will have to prove the claims of Plaintiff and the Class at trial. The parties are currently in the pre-trial discovery phase, during which they are exchanging information about the facts of the case. At a trial, the judge would hear all of the evidence to reach a decision about whether the Plaintiff or Defendant is right about the claims in this case.

  • You do not need to attend the trial. The Class Counsel will present the case on behalf of all Class members. You and/or your own lawyer are welcome, and entitled, to attend the trial at your own expense.

  • If the Class is successful and obtains money as a result of the trial or a settlement, you will be notified about how to participate and receive your share. The parties at this time do not know how long this will take.

  • If you have additional questions about the Notice, you may view the additional information available on this website, or you may contact Class Counsel:

    Stephen A. Swedlow, Esq.
    Quinn Emanuel Urquhart & Sullivan, LLP
    500 West Madison St., Suite 2450
    Chicago, IL 60661
    (312) 705-7400
    stephenswedlow@quinnemanuel.com

    Please do not contact the United States Court of Federal Claims with questions or requests for information.

For More Information

Visit this website often to get the most up-to-date information.

Mail:
Risk Corridors Class Action
c/o JND Class Action Administration
PO Box 6878
Broomfield, CO 80021