Federal Appeals Court Rules Patients Can Sue Insurers for Violation of Parity Act

In a precedent-setting decision, the United States Court of Appeals for the Second Circuit ruled today that claims administrators who exercise “total control” over health plans may be sued for breaching their fiduciary duties under the Employee Retirement Income Security Act of 1974 (“ERISA”). The appeals court ruled that a state psychiatric association may also sue in a representational capacity on behalf of its psychiatrist members and their patients to seek broad-based injunctive for violations of mental health parity mandates. The ruling sends New York State Psychiatric Association, Inc. et al. v. UnitedHealthGroup et al. back to the U.S. District Court for the Southern District of New York.

“The ruling is exceptional for a variety of reasons,” explained Meiram Bendat of Psych-Appeal, co-counsel for the plaintiffs. “The Second Circuit clearly understood that patients should not have to sue their employers, who are typically the benefit sponsors, to enforce parity compliance by claims administrators who act as health plan fiduciaries.”

Further details are provided in the ruling and the press release.

Related coverage:

Second Circuit Reinstates Mental Health Parity Case Against UnitedHealth, National Law Review, September 15, 2015

Mental Health Parity Ruling Called ‘Watershed’ Case, Bloomberg, August 25, 2015

CBS Sports worker can sue UnitedHealth over mental health parity, Business Insurance, August 21, 2015

Appeals Court Decision Could Push Enforcement of MH Parity Law, Psychiatric News, August 20, 2015

Statement of Patrick J. Kennedy on New York Psychiatric Association v. UnitedHealth Group Ruling, The Kennedy Forum, August 20, 2015

Insurer Dogged by Claim of Mental Health Bias, Courthouse News Service, August 20, 2015