Claims Administrator Liable for Self-Insured Health Plan’s Exclusion of Treatments for Autism Spectrum Disorder

The claims administrator of a self-insured health plan was sued by the parent of a child with autism spectrum disorder over the plan’s exclusion of Applied Behavior Analysis (ABA) and Intensive Behavioral Therapies (IBT). While the child was covered, the plan specifically excluded both treatments, although the exclusion was dropped soon after the child’s coverage ended. The parent claimed that the administrator’s enforcement of the exclusion was a breach of fiduciary duty and a violation of the Mental Health Parity and Addiction Equity Act (MHPAEA). The administrator argued that it was not a fiduciary as to the exclusion’s enforcement and that the exclusion was not an impermissible treatment limitation under the MHPAEA.

The court concluded that the administrator was an ERISA fiduciary sufficient for the claim for breach of fiduciary duty to proceed. It rejected the administrator’s contention that it had no discretion and was required to enforce the plain written terms of the plan, and cited the administrator’s undisputed authority to make benefit determinations, which it did when it denied the claims. The court ruled in the parent’s favor without a trial on the parity claim, holding that the plan’s exclusion of the treatments created a separate treatment limitation applicable only to services for a mental health condition in clear violation of the MHPAEA. Furthermore, the exclusion contravened the MHPAEA by requiring more restrictive limitations than the predominant treatment limitations that applied to substantially all medical and surgical benefits.

EBIA Comment: The DOL has listed treatment limitations regarding autism spectrum disorder as one of three areas of emphasis in its 2021 MHPAEA enforcement strategy (see our Checkpoint article). In addition, the agencies’ overall commitment to mental health parity enforcement has been bolstered by the Consolidated Appropriations Act, 2021, which expands the compliance obligations of plans imposing nonquantitative treatment limitations (NQTLs) on mental health and substance use disorder benefits (see our Checkpoint article). Under the new law, plans and insurers must perform detailed comparative analyses of the design and application of any NQTLs and must provide the analyses and other specified information to federal or state agencies upon request. For more information, see EBIA’s Group Health Plan Mandates manual at Sections IX.E (“Mental Health Parity: Nonquantitative Treatment Limitations”), IX.H (“Mental Health Parity Reporting Requirements”), and IX.J (“Mental Health Parity Enforcement”). See also EBIA’s Self-Insured Health Plans manual at Section XIII.E (“Coverage Limitations and Exclusions”).

Contributing Editors: EBIA Staff.