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The legal battle over mental health treatment coverage took a dramatic turn Friday as a New York federal judge granted preliminary approval to Anthem's $12.9M ERISA deal, which aims to resolve claims that the insurer improperly denied residential behavioral health treatment under employer-sponsored plans.

U.S. Magistrate Judge Steven I. Locke approved the $12.875 million settlement to advance, setting the stage for a final hearing expected early next year. For thousands of policyholders, the ruling opens the door to long-awaited compensation.

Relief for Patients Denied Care

At the heart of the dispute were allegations that Anthem’s utilization review guidelines wrongly labeled certain residential treatment for mental health and substance use disorders as not medically necessary. Families argued the denials left them without critical care during life-threatening crises.

Under the agreement, eligible ERISA plan members whose claims were denied will receive either a guaranteed $100 minimum payout or a pro rata reimbursement from the fund, depending on the number of valid claims filed. Payments will be distributed after deducting attorney fees, expenses, and settlement administration costs.

Attorneys Behind the Case

The class is represented by a team of heavy-hitting lawyers: Caroline E. Reynolds and Jason S. Cowart of Zuckerman Spaeder LLP, Julie Selesnick of Berger Montague, and Meiram Bendat of Psych Appeal Inc., a firm known for challenging insurers on mental health parity.

Anthem has tapped Rebecca R. Hanson of Reed Smith LLP to defend its position, navigating one of the most closely watched ERISA class actions in recent years.

What Comes Next

If finalized, the settlement will not only bring financial relief but also underscore the growing scrutiny over how insurers apply “medical necessity” standards in behavioral health coverage. For patients and families long caught in the crossfire between care needs and cost-cutting policies, the approval of Anthem’s $12.9M ERISA deal marks a pivotal moment—one that could echo far beyond this courtroom.