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Aetna Agrees To Settle Administaff Case

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NU Online News Service, March 30, 2004, 12:30 p.m. EST – A unit of Aetna Inc., Hartford, has agreed to pay Administaff Inc., Houston, $8.25 million to settle a legal dispute over health coverage rates.[@@]

Administaff, a professional employer organization, filed a suit against Aetna’s Aetna Life Insurance Company unit in the U.S. District Court in Houston. Administaff accused Aetna Life of requiring it to accept a retroactive rate increase.

A jury awarded Administaff $15.5 million in October 2003. The court then granted a motion by Aetna to reduce the judgment to $10.6 million, Administaff says.

The $8.25 million settlement payment will resolve all claims by both parties and help Administaff put time-consuming litigation behind it, according to Administaff Chairman Paul Sarvadi.

At Aetna, “we’re pleased to resolve this outstanding issue,” company spokesman David Carter says.