HUNTINGTON — Federal Judge Robert C. Chambers has preliminarily approved a class-action lawsuit settlement between Cabell Huntington Hospital and retirees who claimed it misrepresented its retiree health and welfare benefits.
The class includes the 211 non-union retirees from Cabell who received notification last year that their retiree benefits would be terminated.
Chambers wrote in his Aug. 10 memorandum opinion and order that while the defendant denies the allegations against it, it nonetheless agreed to the class action settlement and he would grant the motion to certify the class and approve the class settlement and notice.
A final approval hearing will be held on Oct. 31 to consider whether the settlement is fair, reasonable and adequate and if it should be given final approval.
"The parties agreed to settle this matter pursuant to Federal Rule of Civil Procedure 23(b)(3) regarding plaintiffs’ allegations that defendant’s agents made material misrepresentations in substantially the same form to all affected Individuals, indicating that the hospital would provide cost-free retiree health insurance for pre-65 retirees, and Medicare supplemental benefits thereafter throughout the lives of retirees," Chambers wrote.
If approved in October, the settlement would provide payments of more than $18,860 to each of the 211 non-union retirees. A high-risk fund of $500,000 would also be established and the remaining amount of the settlement would go toward attorneys' fees, administrative fees and service fees.
The employees alleged in the 2021 law suit that Cabell Huntington Hospital had violated the Employee Retirement Income Security Act of 1974 by misrepresenting its lifetime retiree health and welfare benefits.
Martha "Marty" Blenko and Laura Mullarky filed the class-action lawsuit alleging that CHH repeatedly represented to them they could retire as non-union employees beginning at age 62 and retain their health insurance if they had attained 17 years of credited service, according to a complaint filed May 25, 2021, in federal court.
"Cabell further informed the plaintiffs Cabell would provide comparable health insurance to the non-union retirees until they became Medicare-eligible, and that Cabell would then provide a comparable, cost-free Medicare supplement throughout the rest of those retirees’ lives," the complaint states.
Blenko said she and Mullarky and the class members just want what they were promised.
"Cabell's action takes away precious benefits to people who have planned their retirement income on the knowledge that we would not have medical health premiums to pay," Blenko said in a previous interview with The West Virginia Record. "The group of retirees includes many elderly (80+years) with severe medical problems. We don’t deserve to have our benefits pulled out from underneath us at such a medically vulnerable time in our lives. We want the plans and benefits we worked for and were promised. The retirees proudly and loyally gave their service to Cabell Huntington Hospital because of these benefits. We were told during the hiring process, in numerous employee meetings, and again at retirement, that we would receive these benefits for life. The change of the lifetime health benefits policy should not include those currently retired."
However, the plaintiffs claim the hospital breached its fiduciary duties by misleading them regarding their retiree welfare benefits and inducing them to retire based on misrepresentations about their likely receipt of future benefits under the operative welfare benefit plan, according to the suit.
The plaintiffs claim in January 2021, the hospital announced the termination of welfare benefits for non-union retirees effective March 31, 2021, which was later extended to September 2021.
The plaintiffs want an injunction to prevent the termination of retiree welfare benefits because the loss of benefits would cause them to immediately postpone or forego critical medical care during a medically vulnerable time as the population is attempting to emerge from a global pandemic.
"Defendant also failed to timely provide plaintiffs with a copy of the summary plan description (SPD) when the plaintiffs first became participants in the relevant plan," the complaint states. "Specifically, defendant failed to timely provide plaintiffs with a copy of the SPD when it adopted a new retiree welfare benefits plan in 2019, and yet continued misrepresenting the retiree welfare benefits would remain the same as they had been under the prior plan in place from 1955 to 2019."
Blenko and Mullarky retired from Cabell as non-union employees in 2018 and 2019. They met with hospital personnel prior to retirement and discussed their retirement plans.
The plaintiffs are represented by Samuel B. Petsonk of Petsonk PLLC in Beckley and Bren J. Pomponio and Laura Davidson of Mountain State Justice in Charleston.
U.S. District Court for the Southern District of West Virginia case number: 3:21-cv-00315