By Pension and Benefits Editorial Staff
A recipient of mental health services whose health plan reduced the amount of reimbursement for out-of-network psychologists and social work services was allowed to sue the plan administrator for alleged ERISA violations, but her claims were dismissed as to the non-administrator entities, a federal district court has ruled. In a recovery of benefits claim under 29 U.S.C. Sec. l 132(a)(l)(B), only the plan and the administrators and trustees of the plan in their capacity as such may be held liable. As to her claims under the Federal Parity Act, the financial restrictions for mental health services were found to have violated the Act.
Out-of-network counseling services. The patient was a participant in a large employer health insurance plan and she received counseling from a psychologist, and from a licensed clinical social worker, both of whom were "out-of-network" or "non-participating" providers who did not have contracts with the plan for in-network rates. The allowed amount for those health services were reduced by 25 percent to 30 percent under the plan.
She filed suit for recovery of benefits under her health insurance plan and for enforcement and clarification of her rights pursuant to the Federal Parity Act, and New York’s Timothy's Law, Section 2706 of the Patient Protection and Affordable Care Act (ACA), and ERISA, 29 U.S.C. Sec. 1132(a)(l)(B). The health insurance companies moved to dismiss the complaint, and for the reasons cited below, the court granted in part and denied in part those motions.
Only the plan, administrators, and trustees liable. The court found that in a recovery of benefits claim under 29 U.S.C. § l 132(a)(l)(B), only the plan and the administrators and trustees of the plan in their capacity as such may be held liable. If a plan specifically designates a plan administrator, then that individual or entity is the plan administrator for purposes of ERISA. Accordingly, the court held that Oxford Health Insurance (OHI), the plan’s issuer and administrator, was a proper party for the ERISA claims, but that the non-OHI entities were not, and the claims against those parties were dismissed.
Federal Parity Act. Congress enacted the Federal Parity Act to end discrimination in the provision of insurance coverage for mental health and substance use disorders as compared to coverage for medical and surgical conditions in employer-sponsored group health plans. Under the Act, a health insurer must ensure that both the financial requirements and the treatment limitations applicable to mental health and substance use disorder benefits are no more restrictive than the predominant financial requirements and treatment limitations that apply to medical and surgical benefits.
The court found that the patient plausibly stated a claim under the Federal Parity Act that the health plan’s reimbursement policy was a discriminatory non-quantitative treatment limitation. As of the motion stage of the litigation, the patient was found to have properly stated a claim for violation of the Federal Parity Act, and the motion to dismiss as to that claim was denied.
ACA. The court also held that Section 2706 of the ACA created no private right of action and the beneficiary could seek to recover benefits under ERISA for a violation of that ACA section.
SOURCE: Doe v. United Health Group, Inc. (E.D.N.Y.), No. 17-C-4160, August 20, 2018.
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