Montana Federal Court Gives Final Approval to $8 Million National Class Settlement in Short Term Medical Insurance Case

United States District Judge Susan Watters (D. Mont., Billings Division) gave final approval to an $8 million settlement agreement in a national class action that alleged underpayment of benefits by Unified Life Insurance Company (Unified Life) under short term medical insurance policies. Butler v. Unified Life et al. began as an individual breach of contract and bad faith case.

Charles Butler purchased a short term medical policy from Unified through Health Insurance Innovations (HII) and National Brokers of America. Four months later, Butler was diagnosed with testicular cancer. He underwent surgery in August 2016. In February 2017, Butler was told his cancer had metastasized to his lung. The policy expired at the end of that month. Unified and its TPA, Allied National, failed to pay bills. After counsel and the state insurance department became involved, Unified/Allied paid some of the bills with steep discounts. Butler sued Unified, Allied, HII, and others. During discovery, Butler learned the bills were discounted using the Data iSight formula sold by MultiPlan, which generated reasonable and customary charge amounts that were substantially less that the policy promised. Butler moved for class certification and partial summary judgment on the class issue. Both were granted. After reconsideration motions by Unified were rejected, the parties reached the $8 million class settlement agreement in a mediation with United States Magistrate John Johnston in May 2021. The mediation also resulted in a $900,000 new money settlement for Charles and Chole Butler individually. The Final Approval Order was entered November 18, 2021.