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Tag: insurance

  • Nationwide Pushes Back on Cannabis Coverage, Raising Industry Concerns

    Nationwide Pushes Back on Cannabis Coverage, Raising Industry Concerns

    A Nationwide insurance subsidiary told an Illinois federal court that a cannabis company is not entitled to coverage for a proposed class action accusing it of misrepresenting the safety and labeling of cannabis-infused products, according to ClassAction.org. The insurer argues that the cannabis company’s liability policies do not cover allegations of fraud, misrepresentation, or deceptive practices.

    The underlying lawsuits allege that certain cannabis products—including vape oils marketed as concentrates—were mislabeled to bypass Illinois’ stricter THC limits and misled consumers about potency and safety. Plaintiffs argue the practices violated state consumer protection laws and exposed buyers to unsafe products.

    The Nationwide filing underscores the growing challenges cannabis firms face in securing reliable insurance protection as litigation risks mount. If the court agrees, the cannabis company will be forced to bear defense costs itself, a potentially costly outcome in an industry already grappling with regulatory complexity.

  • Illinois: Smokers Get Health Coverage Settlement

    Illinois: Smokers Get Health Coverage Settlement

    Car parts manufacturer UGN Inc. signed a $299,000 class settlement in a lawsuit saying it wrongly charged tobacco-using workers an annual $1,152 penalty for health coverage without providing a valid way to avoid the fee.

    It appears employees could have avoided the $96 monthly surcharge by completing a smoking cessation program, but the complaint alleged that the company’s health plan information documents did not mention this alternative. In fact, the filing claimed “the various benefits guides provided to participants are ‘silent’ on the topic of smoking cessation programs or the possible reimbursement of the tobacco surcharge.

    Filed in October 2024 in the U.S. District Court for the Northern District of Illinois, the lawsuit argued the extra fee violated the federal Employee Retirement Income Security Act (ERISA), whose anti-discrimination provisions preclude any insurer or medical plan from assessing an additional charge based on a “health-status related factor,” which includes tobacco use unless the surcharge is part of a bona fide “wellness program.”

    The proposed settlement would benefit 431 people who paid the tobacco surcharge in connection with UGN’s health plan between August 2018 and December 2024 and would amount to an estimated 36% of the workers’ damages.