If your company recently received a check from Blue Cross Blue Shield Association (BCBS), you may be wondering where it came from. You are not alone. The check likely relates to a class action suit filed in 2012, where plaintiffs alleged that BCBS and its affiliates violated federal antitrust laws by limiting competition. In 2020, BCBS agreed to settle the case, and as part of that settlement, BCBS agreed to pay over $2 billion to eligible individuals and employers who had purchased BCBS health plans (including fully insured plans and self-funded plans). Employer-sponsored group health plans had to file claims to participate in the settlement fund. This likely occurred years ago since the claims window closed in 2021.
BCBS began distribution of the settlement checks in May of 2026, and we have received calls from clients asking what to do with those checks. In typical attorney fashion, the answer is “it depends.” As a general rule, if the employer pays the full cost of group health plan coverage, then the funds used to make those payments are not considered “plan assets” and any settlement check associated with that plan would go back directly to the employer. If the employer pays a portion of the premium and the employee pays a portion of the premium, then the portion attributable to the employee’s contribution is considered plan assets and must be handled accordingly. Under the Employee Retirement Income Security Act (ERISA), plan assets must be used for the exclusive benefit of the plan participants and must be used for the benefit of those plan participants. This means that those funds attributable to employee contributions must be used to provide additional benefits to plan participants, used to provide a premium holiday, premium reduction, or in some other manner that benefits the participants and NOT the plan sponsor.
So, if you have received a BCBS settlement check in the mail recently, we recommend that you talk to your ERISA counsel to determine where these funds should be applied. If your group health plan is paid for by both employer and employee contributions, then it is likely that a portion of the settlement funds will need to be used to benefit employees and not simply deposited into the company’s account. Failure to handle this properly could result in a prohibited transaction under ERISA, which carries with it civil penalties.
