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In Rutledge v. Pharmaceutical Care Mgt. Assoc., — U.S. –, 2020 WL 7250098 (Dec. 10, 2020), the Supreme Court held that ERISA’s broad express preemption will not reach a state law that focuses on the price of prescription drug benefits that a plan chooses to provide.

The particular question in Rutledge was whether ERISA preempted an Arkansas law regulating the price at which pharmacy benefit managers (PBMs) reimburse pharmacies for the cost of drugs covered by ERISA prescription drug plans. The Court described PBMs as

a little-known but important part of the process by which many Americans get their prescription drugs. Generally speaking, PBMs serve as intermediaries between prescription-drug plans and the pharmacies that beneficiaries use. When a beneficiary of a prescription-drug plan goes to a pharmacy to fill a prescription, the pharmacy checks with a PBM to determine that person’s coverage and copayment information. After the beneficiary leaves with his or her prescription, the PBM reimburses the pharmacy for the prescription, less the amount of the beneficiary’s copayment. The prescription-drug plan, in turn, reimburses the PBM.

Continue Reading Supreme Court Rules that ERISA Does Not Preempt State Law Regulating PBM Reimbursements

In Cook v. Life Insurance Company of North America et al., No. 3:20-cv-139, the plaintiff, Robert Cook, sued Life Insurance Company of North America (LINA), and its indirect corporate parent, Cigna Corporation, for denial of long-term disability benefits under the Employment Retirement Income Security Act of 1974 (ERISA). Cook lived in Tennessee (and his lawyer was located there), his employer/plan sponsor was based in Florida, and LINA, the insurer, was located in Pennsylvania. Nevertheless, Cook brought suit in Connecticut, alleging venue was proper because he had also sued LINA’s indirect parent, Cigna Corporation, which is a Connecticut corporation.
Continue Reading Connecticut District Court Enforces ERISA Venue Provisions and Dismisses Lawsuit with No Connection to Connecticut

Excerpt of a contributed article published by DRI in the August 2020 issue of For The Defense.

As the new coronavirus (COVID-19) spreads within the United States, questions arise over the potential effect that it may have on private group health and disability plans during and after the current pandemic. This article discusses recent federal…

Those involved in disability claims administration may wish to consider the potential impacts of the current global pandemic. In the current crisis, disability claims regulations may not be at the top of many peoples’ minds. However, insurers, plan administrators, and other involved in disability claims administration may wish to reevaluate the applicable Department of Labor deadlines and requirements in light of present pressures on medical personnel, persons with serious health problems, and business disruptions.
Continue Reading Disability Claims Regulations and the COVID-19 Pandemic

In Ariana M. v. Humana Health Plan of Texas, Inc., No. 18-20700, 2019 WL 5866677 (5th Cir. Nov. 8, 2019), the Fifth Circuit Court of Appeals rejected a plaintiff’s petition for attorneys’ fees under 29 U.S.C. § 1132(g).  This case concerns Humana Health Plan of Texas, Inc.’s denial of benefits for hospitalization to treat an eating disorder.  On a prior appeal, Ariana M. v. Humana Health Plan of Texas, Inc., 884 F.3d 246 (5th Cir. 2018) (en banc) (“Ariana I”), the Fifth Circuit concluded that the District Court erred by conducting a deferential review of the claim decision, that it remanded the case for a de novo review of Humana’s decision.

On remand and de novo review, the District Court found Humana had not erred and entered summary judgment in Humana’s favor.  Nonetheless, Ariana filed a fee petition, asserting that her success in Ariana I in convincing the appellate court to change the standard of review and remand her case entitled her to fees regardless of whether she ultimately won her claim for benefits.  The District Court denied her petition.Continue Reading Remand Directing Change in Standard of Judicial Review Is Not Sufficient Success on the Merits to Support Attorneys’ Fee Award

Wilderness therapy, also referred to as outdoor behavioral healthcare, is a treatment modality that uses expeditions into the wilderness as a means of addressing behavioral and mental health issues. Claims that health plans pay for wilderness therapy have been denied for various reasons, including the lack of accreditation of the program or licensing of the providers, or that the treatment is not medically necessary.

In the majority of recent wilderness therapy coverage suits, plaintiffs allege wilderness program exclusions violate the Mental Health Parity and Addiction Equity Act (“Parity Act”). Several recent district court decisions provide guidance on whether the criteria used to deny coverage of “wilderness programs” may be considered a potential Parity Act violation.
Continue Reading Successful Pleading Challenges to Parity Act Claims Regarding Wilderness Treatment

In Vest v. Resolute FP US, Inc., 905 F.3d 985 (6th Cir. 2018), the Sixth Circuit Court of Appeals upheld dismissal of a claim by the beneficiary of a deceased employee that the employer breached its fiduciary duty under ERISA §502(a)(3), 29 U.S.C. §1132(a)(3) by failing to notify the decedent of his right to port or convert his group life insurance coverage to an individual life insurance policy after he ceased active employment.
Continue Reading Sixth Circuit Finds No Fiduciary Duty To Give Notice Of Conversion/Portability Rights On Termination Of Employment

The Second Circuit recently held that alleged misrepresentations by a “ministerial” plan representative about plan benefits will not support a claim for breach of fiduciary duty if the SPD clearly provides “complete and accurate” information, but might support a claim for breach of fiduciary duty if the SPD does not.  In re DeRogatis, 16-977-cv, 16-3549-cv (2d Cir. Sept. 14, 2018) (slip op.).

Petitioner’s Claim

Emily DeRogatis brought two lawsuits concerning benefits under her deceased husband’s pension and health plans. She claimed that two plan employees provided inaccurate information about her husband’s eligibility for, and the amount of, survivor benefits payable under the pension plan, and the impact of early retirement on health benefits under the welfare plan.
Continue Reading Second Circuit Speaks On When Ministerial Acts Can Breach a Fiduciary Duty

In Hansen v. Group Health Cooperative, 2018 U.S. App. LEXIS 25033, (9th Cir. Sep. 4, 2018), two psychotherapists (“Providers”) sued Group Health Cooperative (“GHC”) in Washington state court, alleging GHC engaged in unfair and deceptive practices, in violation of Washington’s Consumer Protection Act.

The Providers claimed that GHC engaged in unfair and deceptive business practices by utilizing so-called Milliman Care Guidelines as its primary and exclusive criteria for authorizing mental health treatment. The problem with GHC’s use of these guidelines, according to the Providers, was that they:  (1) were intrinsically biased against mental healthcare, (2) were utilized to avoid paying for mental healthcare required by Washington’s Mental Health Parity Act, and (3) enabled GHC to unfairly compete by employing its own psychotherapists and discouraging patients from seeking treatment from rival practitioners.
Continue Reading ERISA Does Not Preempt Third Party Providers’ Unfair And Deceptive Business Practice Claims Against Health Insurer, Rules Ninth Circuit

Video surveillance can be an extremely effective tool in making disability benefits determinations.  Historically, courts have cautioned that the weight given to surveillance in these cases depends both on the amount and nature of the activity observed. A recent ERISA case out of the Western District of Tennessee provides insurers with guidance on the use of video surveillance in disability benefits decisions. The case is Eaton v. Reliance Standard Life Ins. Co., No. 2:16-cv-02764-TLP-cgc, 2018 U.S. Dist. LEXIS 127488, at *1 (W.D. Tenn. July 31, 2018).
Continue Reading New Case Gives Guidance on Video Surveillance in Disability Cases