Cabell Huntington Hospital agrees to nearly $5.7 million lawsuit settlement with some retirees

HUNTINGTON — A federal judge in Huntington granted preliminary approval of a nearly $5.7 million class action lawsuit settlement between Cabell Huntington Hospital and some of its retirees who accused the provider of reneging on health care benefit promises.

If the settlement is approved, it would provide payments of more than $18,860 to each of 211 non-union retirees who were told in 2021 that their health coverage with Cabell Huntington would be terminated, which is approximately $4 million of the total settlement. A high-risk fund of $500,000 would be established and the remaining amount of the settlement would be for service, administrative and attorneys’ fees.

Judge Robert C. Chambers of the U.S. District Court for the Southern District of West Virginia signed the approval order Wednesday, Aug. 10.

The retirees filed an Employee Retirement Income Security Act complaint in May 2021 against the hospital for terminating some retirees’ supplemental Medicare health care benefits.

The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans.

The complaint was filed at the Huntington Division of the U.S. District Court for the Southern District of West Virginia by Beckley attorney Sam Petsonk and Charleston attorneys Bren Pomponio and Laura Davidson with Mountain State Justice Inc. on behalf of Martha Blenko, Laura Mullarky and others.

It said Cabell Huntington Hospital repeatedly represented to the plaintiffs that 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.

The complaint came after some retirees received a letter stating their supplemental Medicare insurance benefit would be terminated at the end of March 2021.

The letter, dated Jan. 28, 2021, states in part, “Cabell Huntington Hospital will no longer offer a Medicare supplement plan to non-bargaining retirees.”

The letter also included notification that early retirees would have to start paying premiums for bridge coverage until they become eligible for Medicare. Bridge coverage is for those taking early retirement at age 62 until they become eligible for Medicare.

However, the complaint said the hospital never told the retirees that it reserved the right to terminate retiree welfare benefits.

Both the hospital and the retirees asked the judge in July to approve the $5,694,500 settlement. The hospital denies the retirees’ claims but agreed to the settlement, according to court records.

A final approval hearing is scheduled for Oct. 31 to consider whether the settlement is fair, reasonable and adequate.

The action does not involve St. Mary’s Medical Center or any other Mountain Health Network hospitals.

Messages seeking comments from both the plaintiffs and defendant were not immediately returned.