If You Were a Subscriber or Beneficiary of a Health Net Plan at Any Time Between 1995 and 2007 You May Be Eligible to Participate in a Class Action Settlement

Business Wire, May 23, 2008

NEW YORK -- A Settlement has been proposed in a class action lawsuit involving Health Net, also formerly known as Physicians Health Services, PHS, and First Option Health Plan. The Settlement will provide up to $215,000,000.00 for payments to subscribers or beneficiaries of various Health Net Plans from July 1995 to July 2007. If you qualify, you may send in a claim form to get benefits, or you can exclude yourself from the Settlement, or object to it. The United States District Court for the District of New Jersey authorized this Notice. Before any money is paid, the Court will have a hearing to decide whether to approve the settlement.

Who is Included? You are a Class Member and could get benefits if you were in an employer health insurance plan with Health Net from April 1, 1997 to July 31, 2007 (or as early as July 1, 1995 if you were in a New Jersey small employer plan), or an individual and family plan with Health Net from September 1, 2004 to July 31, 2007. The Classes before the Court are:

(a) a subscriber or beneficiary in any large or small employer plan from April 1, 1997 to August 31, 2004, other than in a New Jersey small employer plan, who received medical services or supplies (including, inter alia, surgery, anesthesia, and the like) from an Out-of-Network Provider and for whom Health Net made reimbursement determinations less than the providers' actual charge; ("McCoy Class") or

(b) a subscriber or beneficiary of any New Jersey small employer plan from July 1, 1995 through August 31, 2004, who received medical services from an Out-of-Network Provider and for whom Defendants made reimbursement determinations less than the providers' actual charge; ("Wachtel Class") or

(c) a member in any large or small employer plan insured by Health Net, and subject to ERISA, from September 1, 2004 through July 31, 2007, who received medical services or supplies (including, inter alia, surgery, anesthesia, and the like) from an Out-of-Network Provider and received reimbursement of less than the provider's billed charge; ("Scharfman ERISA Class") or

(d) a member in any large or small employer plan, or any individual and family plan, insured by Health Net from September 1, 2004, through July 31, 2007, who received medical services or supplies (including, inter alia, surgery, anesthesia, and the like) from an Out-of-Network Provider and received reimbursement of less than the provider's billed charge that was determined by Health Net, Guardian or a third party vendor applying Health Net's out-of-network claims practices, including the use of Ingenix data ("Scharfman RICO Class").

What's This About? These actions challenge the way that Health Net pays claims when members of Health Net's health insurance plans use medical providers who are not part of their network. These actions claim that Health Net provided inadequate usual, customary and reasonable reimbursement to its members for covered services provided by out-of-network providers by using the Ingenix databases and/or other protocols or methods. These actions also challenge the quantity and quality of the information Health Net provided about how it will pay for covered out-of-network care, how Health Net explained its benefit denials and how it decided appeals from subscribers who disagreed with Health Net's decisions. Health Net denies these allegations and any wrongdoing or liability.

What Does The Settlement Provide? Health Net has agreed to create a Cash Settlement Fund of $175,000,000.00 (of this amount, $15,000,000.00 has been allocated for payments ordered by the New Jersey Department of Banking and Insurance) and a Prove Up Settlement Fund of up to $40,000,000. The Cash Settlement Fund and the Prove Up Settlement Fund will be distributed pursuant to the Settlement Agreement and a Plan of Allocation to Class Members who timely file a Claim Form and Release. Further, Health Net will initiate certain business practices for the benefit of Class Members.

How Do You File A Claim? In order to be eligible for a payment under the Settlement, you must complete, sign, and mail the Claim Form and Release SO THAT IT IS POSTMARKED NO LATER THAN AUGUST 25, 2008. A Claim Form is part of the full notice package you can request below.

What Are Your Other Options? If you don't want to be legally bound by the Settlement, you have the right to exclude yourself by submitting a written request for exclusion postmarked no later than June 23, 2008. If you exclude yourself, you can't get money from this Settlement. If you stay in the Settlement, you may object to it by June 23, 2008. The detailed notice explains how to exclude yourself or object.

The Court will hold a hearing in these cases, McCoy v. Health Net, Inc., et al. (03-cv-1801), Wachtel v. Health Net, Inc., et al. (01-cv-4183), and Scharfman v. Health Net, Inc., et al. (05-cv-0301) on July 24, 2008, to consider whether to approve the Settlement and a request by the lawyers representing all Class Members (Barry M. Epstein, Esq. and Barbara G. Quackenbos, Esq. of Wilentz, Goldman & Spitzer PA, 90 Woodbridge Center Drive, P.O. Box 10, Woodbridge, NJ 07095-0958, and D. Brian Hufford, Esq. and Robert J. Axelrod, Esq. of Pomerantz Haudek Block Grossman & Gross LLP, 100 Park Avenue, New York, NY 10017-5516) for attorneys' fees and costs, for investigating the facts, litigating the case, and negotiating the Settlement. You may ask to appear at the hearing but don't have to.