OAKLAND — A jury trial could begin as soon as next week for a lawsuit filed by the University of California against the firm it consulted to help develop the UC Student Health Insurance Plan.
At a court hearing Tuesday, the two sides discussed whether certain witness testimony was admissible for the eventual trial. The lawsuit against Aon Hewitt was filed in October 2013.
The UC Board of Regents is suing the consulting firm for allegedly negligent actuarial and consulting services, which the university said in a complaint were responsible for a deficit in the university’s health insurance plan of more than $57 million between 2010 and 2013.
The university alleged in court documents that the company misrepresented itself as an expert in health insurance for higher education and “failed to be candid with the university” about the risks and challenges of switching to a self-funded insurance plan in which the university would assume direct financial risk.
The university’s complaint claims that while the university relied on Aon Hewitt’s expertise to determine the feasibility of consolidating a systemwide health insurance plan, the company falsely projected $10 million savings in cost in the first year alone.
The company’s “negligent and reckless errors,” the complaint alleges, caused a $4.83 million deficit in plan year 2010-11, and the regents said Aon Hewitt failed to adjust accordingly in the next two plan years, leading to a total deficit of $57.41 million.
As a result of the deficit, UC Berkeley withdrew from UC SHIP and returned to its self-operated, fully funded Student Health Insurance Plan in 2013.
MacKenzie Lucas, Aon Hewitt’s manager of public relations, previously said that the company cannot comment on the issue specifically but that it will “remain committed to serving all of our higher education clients.”
On Tuesday, Alameda County Superior Court Judge George Hernandez, who presided over the most recent hearing, said a trial jury could be selected by the end of this week at the earliest.
Staff writer Tianyi Dong contributed to this report.
Contact Kayla Kettmann and Mira Chaplin at [email protected]
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