UnitedHealth Group agreed to pay $69 million to settle a class-action lawsuit from an employee who alleged the health care giant offered its employees lower-performing 401(k) options than it could have, costing workers hundreds of millions in lost investment profits.
The litigation alleged interference by the company’s CFO to retain certain Wells Fargo funds within the 401(k) plan because the bank was a large customer for UnitedHealth Group, including for coverage sold by its large UnitedHealthcare health insurance business.
News of the settlement between UnitedHealth and the plaintiffs came after a judge in Minneapolis ruled earlier this year that a jury could conclude, based on evidence discovered during the case, that the company had been caught with its “hand in the cookie jar.”
Lead plaintiff Kim Snyder filed the case more than 3½ years ago. Class certification was granted by the judge, and Snyder’s attorneys say the class could include more than 300,000 people.
“Over the course of three and a half years of litigation, plaintiff Kim Snyder ... bore the particular burden of being the only class representative in the action,” Charles Field, an attorney with Sanford Heisler Sharp McKnight, said in a statement to the Minnesota Star Tribune. “Ms. Snyder’s commitment to this case was the means of obtaining an outstanding outcome for the plan and the class.”
Snyder was not available for comment.
UnitedHealth Group said in a statement that the company’s 401(k) plan fiduciaries have always acted in the best interest of those using the plan to save for retirement.
“We strongly deny any allegations to the contrary,” UnitedHealth Group said. “If approved by the court, this settlement will enable all parties to put this matter behind them and move forward.”