Briscoe v. Health Care Services Corporation
1:16-cv-10294
N.D. Ill.Dec 4, 2017Background
- Three women (Briscoe, Magierski, Adams) insured by Blue Cross and Blue Shield of Illinois (BCBSIL) sought reimbursement for International Board Certified Lactation Consultant (IBCLC) visits after childbirth; each could not identify in-network lactation providers via BCBSIL’s Provider Finder or customer service.
- Plaintiffs allege BCBSIL informed them there were no in‑network lactation providers, yet BCBSIL imposed cost‑sharing or denied full reimbursement for out‑of‑network lactation counseling claims.
- Plaintiffs amended to bring class claims under ERISA (Counts I–III), the ACA’s anti‑discrimination provision §1557 (Count IV), and state law (breach of contract Count V; unjust enrichment Count VI).
- Defendants (HCSC/BCBSIL) moved to dismiss under Rule 12(b)(6), arguing no plausible ACA violation, that some claims are precluded, and targeting specific counts.
- The court treated the factual allegations as true for the motion and found Plaintiffs plausibly alleged (1) improper cost‑sharing when plans lack in‑network lactation providers and (2) administrative barriers rendering coverage illusory.
- Ruling: motion partially granted and partially denied — Counts IV (§1557 disparate‑impact) and VI (unjust enrichment) dismissed with prejudice; Counts I and III dismissed as to Adams and Counts I and III dismissed without prejudice as to Briscoe; Count II (ERISA breach §404) and Count V (breach of contract) survived for the named plaintiffs as detailed below.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether BCBSIL violated the ACA by imposing cost sharing for lactation counseling when no in‑network providers exist | Plaintiffs: BCBSIL had no in‑network lactation providers; thus out‑of‑network preventive lactation services must be fully covered (no cost sharing) | Defendants: Their network does include lactation providers; any cost sharing was permissible | Court: Plaintiffs plausibly alleged no in‑network providers and improper cost sharing; survive dismissal (factual dispute reserved for later) |
| Whether administrative barriers (search tools, inconsistent guidance) violate the ACA by making coverage illusory | Plaintiffs: BCBSIL’s Provider Finder and customer service made it effectively impossible to identify in‑network providers, so coverage is illusory | Defendants: ACA contains no standalone administrative‑burden cause of action; isolated instances don’t undermine coverage | Court: Plausible claim that administrative barriers render preventive coverage illusory; survives dismissal pending discovery |
| ERISA §503/§502 claim for fiduciary breach based on claim denials (Count I) | Briscoe: Denial/appeal process violated ERISA notice and review requirements and fiduciary duties | Defendants: Fail to state plan‑term breach and procedural violations | Court: Dismissed for failure to plead specific procedural defects under §503; Count I dismissed (with limited leave as to Briscoe) |
| ERISA §404 fiduciary breach for improper benefit determinations (Count II) | Briscoe: Denying/charging cost sharing for benefits that should be fully covered breaches fiduciary duty | Defendants: Attack depends on lack of plausible ACA violation | Court: Because ACA violations were plausibly pleaded, Count II survives as to Briscoe |
| ERISA co‑fiduciary/knowing participation claim (Count III) | Briscoe: HCSC and BCBSIL jointly liable as co‑fiduciaries or knowing participants in breaches | Defendants: No facts showing co‑fiduciary relationships or knowing participation | Court: Dismissed for failure to plead factual basis for co‑fiduciary liability |
| §1557 sex‑discrimination claim (Count IV) — disparate impact theory | Plaintiffs: Failure to provide meaningful lactation coverage disparately impacts women; §1557 allows disparate‑impact claims | Defendants: Plaintiffs fail to state disparate‑impact elements; OCR guidance is not controlling | Court: §1557 incorporates Title IX enforcement mechanisms; Title IX does not permit disparate‑impact claims for sex discrimination — Count IV dismissed with prejudice |
| State law breach of contract (Count V) | Magierski: Plan contract incorporates ACA preventive benefits; denial breached contract | Defendants: Claim depends on ACA violation and preemption arguments | Court: Contract claim allowed to proceed (ACA does not bar state contract remedies) |
| Unjust enrichment (Count VI) | Magierski: Alternatively, BCBSIL was unjustly enriched by withholding payments | Defendants: Express contract exists; unjust enrichment barred | Court: Dismissed with prejudice under Illinois law because claim rests on an express contract |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (standard for plausible claim on motion to dismiss)
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading must contain factual content permitting reasonable inference of liability)
- Larson v. United Healthcare Ins. Co., 723 F.3d 905 (benefits determinations can be fiduciary acts under ERISA)
- Brosted v. Unum Life Ins. Co. of Am., 421 F.3d 459 (elements of ERISA fiduciary breach claim)
- Jackson v. Birmingham Bd. of Educ., 544 U.S. 167 (Title IX implies private right for intentional sex discrimination)
- Alexander v. Sandoval, 532 U.S. 275 (disparate‑impact private right of action limits under federal statutes)