UnitedHealth Group has settled a class-action lawsuit for $1.4 million over allegations that it wrongly denied coverage for mental health and substance use disorder (SUD) treatment at residential facilities. Judge Mae A. D’Agostino of the U.S. District Court for the Northern District of New York dismissed the case with prejudice and described the allocation of payouts as “fair, reasonable and adequate.”
Members of UnitedHealth’s Employee Retirement Security Act of 1974 (ERISA) health plan who received denials during the class-action period are eligible to receive payouts between $936.72 and $18,734.40. The case covered all persons whose requests for coverage for mental health and substance abuse treatment services received at licensed residential treatment centers were denied based on UnitedHealth’s determination that a component of services was considered experimental, investigational or unproven.
Pattern of Mental Health Parity Violations
This is not the first time UnitedHealth Group has faced legal challenges over mental health coverage practices. In 2021, UnitedHealth Group settled allegations of violation of mental health parity laws for $15.6 million and agreed to take corrective actions after investigations by the U.S. Department of Labor. That same year, UnitedHealth Group reached a separate $10 million settlement to resolve a class action suit alleging improper management of coverage for behavioral health services and a tiered reimbursement system that violated parity laws with lower reimbursement rates for treatment compared to physical care. A case that reached the Ninth Circuit Court of Appeals in 2023 found that UnitedHealth Group’s process for reviewing mental health claims was discriminatory. In 2024, it was fined $450,000 by Minnesota for similar parity violations and allegations that it made mental health care and SUD treatment harder to access than regular medical care. UnitedHealth was also found liable for inaccurately reporting its prior authorization processes.
This article is an AI-assisted summary. All facts and figures are drawn from the original report: https://bhbusiness.com/2026/03/31/unitedhealth-group-settles-case-for-1-4m-over-sud-mental-health-treatment-claim-denials/