Health claims administrator MagnaCare LLC agreed to pay $16 million to settle a Labor Department lawsuit challenging the administrative fees it charged to ERISA-governed plans (Acosta v. MagnaCare Admin. Servs., LLC, S.D.N.Y., No. 1:16-cv-07695-DAB, motion for approval of consent order filed 5/26/17).
The settlement, announced in court papers filed May 26, resolves claims that MagnaCare charged hidden fees to its health plan clients and engaged in improper billing practices. In addition to the payout, MagnaCare agreed to make several changes to its business model, including the following: providing a “transparent fee disclosure” to prospective clients; offering existing and ...
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