24 F.4th 740
1st Cir.2022Background
- N.R., a child insured under Raytheon’s group health Plan administered by UnitedHealthcare, was diagnosed with Autism Spectrum Disorder and received speech therapy for ASD-related language and swallowing impairments.
- The Plan contains an "Exclusions" list barring "habilitative services for maintenance/preventive treatment" and a nested "mental health" sub-list that defines "habilitative services" as services to "keep, learn or improve skills and functioning" (e.g., non‑restorative speech therapy).
- UnitedHealthcare denied N.R.’s speech‑therapy claims solely because the diagnosis listed was ASD, explaining coverage applies only to restorative therapy (i.e., to "restore" previously intact speech); internal notes show no medical‑necessity review or provider contact and the Parity Act argument was not addressed.
- Plaintiffs appealed internally and requested documents about how the non‑restorative exclusion is applied; defendants did not supply the requested administrator information and denied coverage on the stated basis.
- Plaintiffs sued under ERISA (29 U.S.C. §§ 1132(a)(1)(A),(B),(2),(3)), alleging the Plan’s habilitative exclusion (in text or application) violated the Mental Health Parity and Addiction Equity Act; the district court dismissed all counts.
- The First Circuit affirmed dismissal of the fiduciary‑breach claim under § 1132(a)(2), but reversed and remanded the claims for recovery of benefits (§ 1132(a)(1)(B)), administrator disclosure (§ 1132(a)(1)(A)), and equitable relief (§ 1132(a)(3)) to permit discovery on the Parity Act issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Plan violates the Parity Act by applying a habilitative exclusion only to mental‑health benefits | The Plan’s text defines "habilitative services" only in the mental‑health sub‑list and the exclusion, as written or applied, singles out mental‑health treatment (e.g., ASD speech therapy) | The exclusion is universal — it bars non‑restorative habilitative services regardless of whether the underlying condition is medical or mental, so parity is satisfied | Issue plausibly pleaded; taking plaintiff’s allegations and plan text in plaintiffs’ favor, Parity Act violation may exist — remand for discovery |
| Whether breach of fiduciary duty can proceed under § 1132(a)(2) for alleged Parity Act violation | Raytheon and Bull breached fiduciary duties by denying benefits in violation of ERISA/Parity Act; plaintiffs seek restoration of unpaid benefits | § 1132(a)(2)/§1109 remedies are derivative and concern plan‑wide asset losses, not individual benefit denials | Dismissed: § 1132(a)(2) relief is for plan losses/remedies inuring to the plan; plaintiffs’ requested relief is individual (benefits), so § 1132(a)(2) does not apply |
| Whether plaintiff may recover benefits under § 1132(a)(1)(B) when a plan term conflicts with the Parity Act | Parity Act requirements are enforceable plan terms; the habilitative exclusion is inconsistent with ERISA and unenforceable, so benefits are due | The Parity Act does not become a term of the plan permitting § 1132(a)(1)(B) claims; denial under the exclusion was correct | Reversed: Plaintiff plausibly alleged Plan term violates Parity Act, so § 1132(a)(1)(B) claim survives dismissal |
| Whether plaintiff stated a claim for administrator disclosure under § 1132(a)(1)(A)/§1024/§1185a | Plaintiffs sought mandatory plan instruments/criteria and reasons for denial from the plan administrator; they contacted Raytheon (the administrator) and counsel, so § 1132(c) was triggered | Only requests to the plan administrator (not the claims administrator) trigger § 1132(c); plaintiffs did not directly request information from the named administrator | Reversed: On dismissal review plaintiffs plausibly alleged they contacted the plan administrator (via Raytheon/counsel) and are entitled to discovery on whether required documents were withheld |
Key Cases Cited
- Ezra Charitable Tr. v. Tyco Int'l, Ltd., 466 F.3d 1 (1st Cir. 2006) (standard for reviewing motions to dismiss; accept well‑pleaded facts and reasonable inferences for plaintiff)
- Grajales v. P.R. Ports Auth., 682 F.3d 40 (1st Cir. 2012) (motion‑to‑dismiss pleading standard explained)
- Varity Corp. v. Howe, 516 U.S. 489 (U.S. 1996) (benefit determinations are fiduciary acts under ERISA)
- Aetna Health Inc. v. Davila, 542 U.S. 200 (U.S. 2004) (claims/benefit determinations as part of fiduciary responsibilities)
- Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134 (U.S. 1985) (scope of ERISA remedies; §1109 interpretation)
- LaRue v. DeWolff, Boberg & Assocs., Inc., 552 U.S. 248 (U.S. 2008) (clarifying that §1132(a)(2) remedies are derivative and tied to plan injuries)
- Cebollero‑Bertran v. P.R. Aqueduct & Sewer Auth., 4 F.4th 63 (1st Cir. 2021) (procedural point on inference at motion to dismiss)
- Doe v. Travelers Ins. Co., 167 F.3d 53 (1st Cir. 1999) (limitations on required disclosures; distinguishing optional guidelines from mandatory plan instruments)
- A.F. ex rel. Legaard v. Providence Health Plan, 35 F. Supp. 3d 1298 (D. Or. 2014) (holding blanket exclusion of developmental services can violate Parity Act)
- Evans v. Akers, 534 F.3d 65 (1st Cir. 2008) (example of §1132(a)(2) used for plan asset mismanagement)