CNA Financial Corp. is expected to expand its coverage of beneficiaries in assisted living communities in 11 states as part of a lawsuit settlement worth up to $4.85 million. The company was accused of inappropriately denying coverage to some holders of long-term care facility benefit policies.
Judge William M. Conley of the U.S. District Court for the Western District of Wisconsin preliminarily had approved unopposed conditions of the settlement in Daluge, Gwen v. Continental Casualty Company in April, and on Monday, plaintiffs asked him to finalize the settlement.
The lawsuit originally was filed in 2015. Plaintiffs claimed that interpretation of their policies changed so that, even though they were medically eligible for benefits under their long-term care facility benefit policies, they were denied coverage of costs related to their stays because their assisted living communities did not provide 24-hour nursing services.
The lawsuit settlement states that the long-term care facilities no longer will be required to offer certain nursing services in order for policyholders to be covered, according to the motion. Eleven states — Arizona, Florida, Georgia, Indiana, Iowa, Kentucky, Massachusetts, Minnesota, New York, Tennessee and Wisconsin — are affected.
Under terms of the settlement, policyholders individually will be able to obtain up to 60% of benefits for previously filed insurance claims, up to a total of $4.85 million for all policyholders. Separately, CNA will cover 100% of the benefits for future claims “that comply with the significantly relaxed revised claim-handling standards in the settlement agreement,” assuming policyholders meet other eligibility requirements.