Electrical Welfare Trust Fund et al v. United States

Plaintiffs, self-insured health and welfare benefit funds, allege that the Department of Health and Human Services (“HHS”) violated the U.S. Constitution by requiring them to make Transitional Reinsurance Program (“TRP”) contributions under 42 U.S.C. § 18061 of the Affordable Care Act (“ACA”). The claims are brought on behalf of two classes: (1) self-administered plans who made TRP contributions for benefit year 2014, and who allege the TRP contribution was an illegal exaction because it was contrary to the plain language of the statute (“Exaction Class”); and (2) third-party administered plans who made TRP contributions for benefit years 2014, 2015, and 2016, and who allege the TRP was an unconstitutional taking because the Government appropriated the TRP contributions from their trust accounts without just compensation (“Takings Class”).

In July 2021, the Court denied the Government’s motion to dismiss, and in June 2022, the Court certified the Exaction Class and appointed KTMC as Class Counsel.

In May 2023, the Court granted summary judgment in favor of the Exaction Class, and ordered the Government to pay over $185 million to Exaction Class members. The Government subsequently appealed the Court’s judgment, and the parties thereafter negotiated a highly favorable settlement to avoid the risks and delay associated with the appeal. Pursuant to this agreement, which was fully approved by the Court in May 2024, the Government will pay 91.25% of all available damages, or approximately $169 million. Class members will receive a net recovery of approximately 70%, with the average recovery being $350,000 and thirty plans each recovering over $1 million.

In July 2023, the Court separately granted the Government’s motion for summary judgment as to the claims brought by the Takings Class. Plaintiffs have appealed that ruling to the Federal Circuit. Briefing has been completed and the Federal Circuit is set to hear argument on the appeal.