523 F.Supp.3d 1119
N.D. Cal.2021Background
- The Wipro Limited Health Benefit Plan (ERISA-governed, self-funded) expressly covered autism but, from 2017–2019, contained an explicit exclusion for "Intensive Behavioral Therapies such as Applied Behavior Analysis (ABA) for Autism Spectrum Disorders."
- John Doe (minor) was a Wipro Plan beneficiary; his mother Jane Doe sought coverage for ABA; United Health (claims administrator) denied ABA claims in 2016 and 2019 under the ABA/IBT exclusion.
- Wipro (plan sponsor/administrator) retained sole authority to modify the Plan and fund benefits; United Health administered claims under the Plan.
- Plaintiff sued under ERISA § 1132(a)(3) for breach of fiduciary duty and alleged the exclusion violates the Mental Health Parity and Addiction Equity Act (Parity Act). Cross-motions for partial summary judgment were filed.
- Effective January 1, 2020 the Plan removed the ABA/IBT exclusion; the Court nonetheless resolved the cross-motions on the pre-change record.
- Ruling: the Court held United Health is a fiduciary for purposes of these claims (denying United Health summary judgment on fiduciary status) and held the ABA/IBT exclusion violates the Parity Act (granting plaintiff’s motion for partial summary judgment on parity).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether United Health acted as an ERISA fiduciary when denying ABA claims | United Health exercised discretionary authority in benefit determinations and thus performed fiduciary functions | United Health merely applied the plain, non-discretionary terms of the Plan (ministerial claims processing), so it was not a fiduciary for this conduct | Court: United Health is a fiduciary as to the denial—benefit determinations can be fiduciary acts; denial of benefits here confers fiduciary status (denies United Health summary judgment on fiduciary status) |
| Whether the ABA/IBT exclusion violates the Parity Act (is a prohibited treatment limitation) | Excluding ABA/IBT for autism is a treatment limitation (including nonquantitative limits) that applies only to mental-health benefits and is more restrictive than medical/surgical benefits, so it violates parity | The exclusion is outside the Parity Act’s treatment-limitation concept (arguing regulations limit treatment limitations to quantitative limits and that categorical exclusions are not covered) | Court: Exclusion violates Parity — categorical exclusion of ABA for a covered mental-health condition is a prohibited separate/more-restrictive treatment limitation (grants plaintiff’s partial summary judgment on parity) |
Key Cases Cited
- Pegram v. Herdich, 530 U.S. 211 (ERISA fiduciary status turns on whether actor was performing a fiduciary function for the particular act)
- Depot, Inc. v. Caring for Montanans, Inc., 915 F.3d 643 (9th Cir.) (plan instrument and functional tests for fiduciary status)
- Aetna Health Inc. v. Davila, 542 U.S. 200 (federal ERISA scheme contemplates benefit determinations as fiduciary acts)
- King v. Blue Cross and Blue Shield of Illinois, 871 F.3d 730 (9th Cir.) (insurer can be a fiduciary when it has authority to grant, deny, or review claims)
- A.F. ex rel. Legaard v. Providence Health Plan, 35 F. Supp. 3d 1298 (D. Or. 2014) (developmental-disability/ABA exclusion violated Parity Act)
- Joseph F. v. Sinclair Servs. Co., 158 F. Supp. 3d 1239 (D. Utah 2016) (Parity Act prohibits separate or more-restrictive limits on mental-health benefits)