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Unclear writing is a gold mine for lawyers. And for some 30,000 state employees who had Anthem Blue Cross and Blue Shield health insurance during 2001, it could turn into a $93 million windfall. But first, somebody has to figure out what “member” means. That honor has fallen to Hartford Superior Court Judge Michael R. Sheldon in the tantalizing case of Ronald Gold v. John G. Rowland, et al. Gold is a senior assistant public defender and the lead plaintiff in a potentially huge state employee class action. His goal is to win back, for himself and other state employees, close to $100 million that Anthem paid to Connecticut when it converted from a mutual to a stock company in 2001. Anthem read the applicable language in statutes, articles of incorporation and bylaws as saying there is only one “member” entitled to be paid — the state. Although much of the abstruse language was drafted by Anthem and its subsidiaries, it’s not clear that Anthem read it correctly — or paid the right party — Sheldon concluded in a Jan. 10 decision denying the insurer’s motion for summary judgment. Gold is represented by Elizabeth J. Robbin, of Hartford’s Rogin, Nassau, Caplan, Lassman & Hirtle. Gold contends “member” means every state employee who was continuously insured under the state’s health policy with Anthem Blue Cross Blue Shield, between June 18, 2001 and Nov. 2, 2001. In the private sector, individual employees in Connecticut have received substantial “demutualization” payoffs of Anthem stock, Robbin said. “The amount has ranged from a couple thousand to $15,000 worth of stock. Single people. This isn’t the typical class action where each class member is going to recover a $10 gift certificate to something. This is real money we’re talking about,” she said. Robbin added, “As far as Judge Sheldon’s decision, we consider that a major victory, and hopefully a wake-up call to Anthem, because prior to this decision, Anthem viewed this case as simply a battle between the state and its employees over the $100 million that it had already issued to the state. After reading this decision, Anthem is going to have to realize its exposure directly to the employees for another $100 million dollars.” The $93 million in stock was delivered to State Comptroller Nancy Wyman, then sold, and the proceeds locked away in a state fiduciary account. Charles L. Howard, of Hartford’s Shipman & Goodwin, represents Anthem. Anthem’s main argument for throwing the case out is based on its interpretation of its corporate documents. Subsequently, Anthem added a second theory, invoking what it hoped would be a protective paragraph in its “Plan of Conversion” from mutual to stock company. The language provided a good-faith presumption of correctness when Anthem determines from its own books who should be classified a member — “except for administrative errors.” Sheldon said the clause only provided Anthem with a rebuttable presumption of correctness, not an absolute defense. Furthermore, he wrote, Anthem’s good faith would be a jury issue for trial. MERGER MUDDLING In theory, it shouldn’t be hard to determine who is a member of a mutual company entitled to be paid when it stops being one. Indiana state law says it’s whoever is a member of the converting mutual, on the company’s books, the day the plan of conversion is adopted. In Anthem’s case, that was June 18, 2001. But Connecticut state employees’ journey toward “membership” rights in Anthem started years earlier. In July 1993, Connecticut entered into an “administrative services only” or ASO contract with Blue Cross Blue Shield of Connecticut — four years before it would merge with Anthem. Blue Cross handled the paperwork, but the state was self-insured. The ASO wasn’t an insurance policy, so there were no policyholders — and no membership rights by any definition. When Anthem and Blue Cross Blue Shield merged in 1997, Anthem’s articles of incorporation excluded two groups of policyholders from being a “member” entitled to pay on conversion. Pre-existing policyholders from a company acquired by merger, like Blue Cross, would continue their existing definition of membership. So would the policyholders under any policy issued “as a renewal, amendment or replacement” of a pre-existing policy. Connecticut’s only pre-existing group insurance policy that fit this exception was one for 571 retirees, called Care Plus, which enhanced their Medicare coverage. It defined a member as being “the group as a whole” — not the individuals. Anthem is vigorously arguing that the 1999 group policy, which was in force during the stock eligibility period, should be disqualified as a replacement of the retirees’ “qualified” Care Plus policy, which ceased July 1, 2000. Anthem spokesman Clark Dumont said demutualization is a complex process that “we sought to administer in good faith.” The company believes it satisfied its obligation to distribute cash or stock to the right individuals, he added.

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