Your ERISA Watch – Sixth Circuit Joins Sister Circuits: Denial of Plan Benefits Confers Standing Even If Not Billed Directly for Medical Services
Good morning, ERISA Watchers! Hope you all survived the Mercury retrograde, which I’m convinced brought about the last two terrible notable decisions out of the Fourth Circuit. This week I want to take a moment to highlight two decisions from the Sixth Circuit Court of Appeals. Unfortunately, these opinions are not great for plan participants either, except for a little nugget from Springer v. Cleveland Clinic Employee Health Plan Total Care , No. 17-4181, __F.3d__, 2018 WL 3849376 (6th Cir. Aug. 14, 2018).
In Springer , the plan administrator denied the plan participant’s claim for coverage for air ambulance transportation because he did not seek preauthorization. On the upside, the Sixth Circuit affirmed the district court’s determination that the plaintiff has standing to bring his claim despite the failure to allege a financial loss. The court noted that “[e]very circuit court to consider this issue agrees that a plaintiff in Springer’s shoes does not need to suffer financial loss. The Fifth, Ninth, and Eleventh Circuits have each held that the denial of plan benefits is a concrete injury for Article III standing even when patients were not directly billed for their medical services.” Springer , 2018 WL 3849376 at *2, citing to North Cypress Med. Ctr., Operating Co., Ltd. v. Cigna Healthcare , 781 F.3d 182, 192–94 (5th Cir. 2015); Spinedex Physical Therapy USA Inc. v. United Healthcare of Arizona, Inc. , 770 F.3d 1282, 1289–91 (9th Cir. 2014); HCA Health Servs. of Georgia, Inc. v. Employers Health Ins. Co. , 240 F.3d 982, 991 (11th Cir. 2001), overruled on other grounds by Doyle v. Liberty Life Assur. Co. of Boston , 542 F.3d 1352 (11th Cir. 2008). On the merits, however, the court determined that the plain language of the plan required precertification so it affirmed the district court’s decision in favor of Defendant.
In an unpublished decision in IUE-CWA, et al. v. General Electric Co. , No. 17-3885, __F.App’x__, 2018 WL 3949188 (6th Cir. Aug. 16, 2018), the court added to the body of caselaw decimating the right to lifetime healthcare benefits. The Sixth Circuit affirmed the district court’s holding that the collective bargaining agreement (“CBA”) did not vest lifetime retirement healthcare benefits. The court explained that the text of the CBA fails to establish vesting because the benefit plans contained a reservation-of-rights clause, the general duration provision sets forth the duration of GE’s obligation to provide benefits, and the plans explicitly vest other benefits beyond the CBA which indicates that GE and the unions knew how to vest benefits beyond the CBA but did not do so for the plans in this case. The court concluded that: “The most plausible explanation for the absence of explicit vesting language in these contracts is that they were negotiated when Yard-Man was still the law and so the parties did not think such language was necessary. Unfortunately for the retirees, that argument fails under our case law.”
On an unrelated and happier note, I want to take a moment to welcome and introduce two attorneys new to the Kantor & Kantor team – Susan Meter and Monica Lienke . Susan Meter brings a wealth of ERISA experience to the fold and has opened the firm’s first San Diego, CA location. Monica Lienke has joined the folks at the Alameda office location, helping to spearhead the never-ending fight against the big bad insurance companies.
With that, enjoy the rest of the case summaries on our website at www.lifeanddisabilitylaw.com .