The Haney v. Genworth class action settlement resolved claims that Genworth Life Insurance Company misled roughly 345,000 long-term care policyholders about future premium increases. The court granted final approval on February 15, 2023, and eligible class members were offered a choice among several options pairing cash damages of $1,150 to $10,000 with adjustments to their policy benefits.1Justia Case Law. Haney et al v. Genworth Life Insurance Company et al, No. 3:2022cv00055 – Document 137 (E.D. Va. 2023) The case was filed on January 28, 2022, in the U.S. District Court for the Eastern District of Virginia.2CourtListener. Haney v. Genworth Life Insurance Company, 3:22-cv-00055
What the Lawsuit Alleged
Five class representatives, led by Fred Haney, claimed Genworth knew it would need to impose significant and repeated premium rate increases on certain long-term care policies but failed to disclose that when selling the coverage. The legal theories were breach of contract and fraudulent omission. Plaintiffs argued that with accurate information, they could have made different decisions about buying or keeping their policies.
Unlike policies in earlier Genworth litigation, the policies in Haney were not subject to a formal multi-year rate increase action plan. Genworth evaluated their rates closer to an annual basis, which made the pattern of increases less predictable from the policyholder’s perspective.3Justia Case Law. Haney et al v. Genworth Life Insurance Company et al, No. 3:2022cv00055 – Document 122 (E.D. Va. 2022) Genworth denied all allegations of wrongdoing.
Who Was Eligible
The settlement class included policyholders who owned or had owned one of five specific long-term care insurance policy types issued by Genworth Life Insurance Company or Genworth Life Insurance Company of New York as of January 1, 2013:1Justia Case Law. Haney et al v. Genworth Life Insurance Company et al, No. 3:2022cv00055 – Document 137 (E.D. Va. 2023)
- Choice 2
- Choice 2.1
- California CADE
- California Reprice
- California Unbundled
The class covered approximately 345,000 policyholders across all 50 states, and each identified member was mailed an official notice by the settlement administrator. If you held a different Genworth policy, such as Choice I, PCS I, or PCS II, those were covered by an earlier settlement (Skochin v. Genworth), not this one. The declaration page of your original policy paperwork lists the form number and product name if you need to confirm which one you have.
Settlement Options and Payment Amounts
The settlement did not create a single payout pool. Each class member received a personalized set of options based on their specific policy, payment history, and benefit status. Every option paired a cash damages payment with some form of benefit adjustment.1Justia Case Law. Haney et al v. Genworth Life Insurance Company et al, No. 3:2022cv00055 – Document 137 (E.D. Va. 2023)
Paid-Up Benefit Option
This option converted the policy to fully paid-up status, ending premium obligations. The new lifetime benefit was calculated as total premiums paid, minus any benefits already received, minus $10,000. On top of that recalculated benefit, the class member received a separate $10,000 cash damages payment. The $10,000 subtracted from the benefit was effectively returned as cash, while the remaining paid-up coverage reflected actual premiums paid minus claims already used.
Reduced Benefit Options
For qualifying class members, these options reduced certain policy features in exchange for lower future premiums and a cash payment. The most common version paid $6,000 in damages. A separate variation was available for policyholders with inflation protection who wanted to keep that feature; it retained the inflation benefit while still reducing overall coverage, and came with a $3,000 damages payment.
A catchall reduced benefit option existed for class members who did not qualify for the primary versions. It provided a benefits reduction along with a $1,200 damages payment. The reduced premiums under these options were not frozen permanently and could still be subject to future rate increases.
Non-Forfeiture Status Option
Class members whose policies were already in paid-up, non-forfeiture status could keep their existing paid-up benefits and receive a $1,150 cash damages payment.
Keeping the Policy Unchanged
Anyone who preferred no change could decline all options. Class members who did not respond by the election deadline kept their current policy with no modifications and received no cash payment.
How the Election Process Worked
Genworth mailed each class member a personalized Special Election Letter detailing the exact dollar amounts and benefit changes available for that policy. The letter included a form on which the policyholder selected one option and returned it by a stated deadline. Submissions could be made through a secure online portal, by fax, or by mail.3Justia Case Law. Haney et al v. Genworth Life Insurance Company et al, No. 3:2022cv00055 – Document 122 (E.D. Va. 2022)
Benefit changes also required approval from state insurance regulators before taking effect. Because the court’s final approval order came in February 2023, election letters were mailed after that date, with the deadline stated in each letter. Class members who missed the deadline kept their existing coverage, with no access to the cash payment or benefit adjustment.
Attorney Fees and Administrative Costs
Class counsel’s fee was set at 15 percent of the total cash damages paid to class members, capped at $13 million. The attorneys also sought reimbursement of litigation expenses up to $50,000. Genworth paid these fees separately, so class members’ cash payments and benefit adjustments were not reduced to cover legal costs.4ClassAction.org. Haney et al v. Genworth Life Insurance Company et al Memo in Support of Settlement Genworth also funded all notice and administrative costs.
Tax Implications of Settlement Payments
Cash damages from this type of settlement are generally treated as taxable income. Under federal tax law, only damages received on account of personal physical injuries or physical sickness are excluded from gross income.5Office of the Law Revision Counsel. 26 U.S. Code 104 – Compensation for Injuries or Sickness The Haney settlement involved breach of contract and fraud claims about insurance pricing, not physical injury, so the IRS would generally consider these cash payments taxable.
Insurers issuing settlement payments are typically required to issue a Form 1099 for amounts that do not qualify for a tax exclusion.6Internal Revenue Service. Tax Implications of Settlements and Judgments If you received a cash damages payment, expect a tax reporting document and consider talking with a tax professional about how the payment interacts with your return, especially if you claimed a deduction for long-term care premiums in prior years.
Medicaid Considerations
For class members on Medicaid or close to the eligibility threshold, even a modest settlement payment can create problems. In states that have not expanded Medicaid, eligibility often depends on both income and assets, with asset limits as low as $2,000 for a single person. A $6,000 or $10,000 lump sum could push someone over that limit and trigger a loss of coverage.
In states that expanded Medicaid, where eligibility is income-based, a lump-sum payment received in a single month may count as income for that month. Whether the payment is taxable has no bearing on Medicaid calculations, which use their own rules. Class members in this situation may have been able to spend down the payment on allowable expenses like medical bills or debt within the same month. Reporting any settlement payment to your state Medicaid agency is required, and failing to do so can result in loss of coverage or repayment obligations.
How Haney Differs From the Skochin Settlement
Genworth has faced multiple rounds of class action litigation over long-term care premium increases, and the most common source of confusion is between Haney and the earlier Skochin v. Genworth Life Insurance Company settlement. The two involve different policy types and different factual allegations.
Skochin covered Choice I, PCS I, and PCS II policyholders. Those policies were subject to a formal internal plan at Genworth called the Multi-Year Rate Increase Action Plan, which allegedly produced cumulative rate increases of 250 percent or more over a decade.3Justia Case Law. Haney et al v. Genworth Life Insurance Company et al, No. 3:2022cv00055 – Document 122 (E.D. Va. 2022) The Haney policies (Choice 2, Choice 2.1, and the three California policy types) were not governed by that plan; their rates were evaluated closer to an annual basis. That difference is why the two cases proceeded separately and produced different settlement structures.