Doe v. Deloitte LLP Grp. Ins. Plan, 2025 WL 586670 (S.D.N.Y. 2025)
A participant in an employer sponsored health plan sought a “single case agreement” that would allow plan coverage for his child’s treatment at an out-of-network residential mental health facility. While the plan generally did not cover services performed by out-of-network providers, the plan document set forth procedures for an exception. The participant argued that such an exception was warranted because the plan’s in-network options for the necessary treatment were inadequate; granting the out-of-network facility a single case agreement would allow treatment there to be covered. The plan’s claims administrator denied coverage (both initially and on appeal) due to the facility’s out-of-network status. Because the denial letters failed to address whether to authorize the single case agreement, the court concluded that the decision to deny benefits was arbitrary and capricious and rendered “without reason.”
ERISA requires plans to provide adequate written notice of claim denials, including the specific reasons for the denial, and to afford participants the opportunity for a full and fair review. Here, the denial notices simply stated that the facility was out-of-network and that treatment at the facility was not a covered service. According to the court, it was not clear whether the administrator applied the plan’s utilization review process or otherwise considered whether to provide the requested single case agreement. And even if the exception request was considered, the lack of explanation in the notices left the court unable to review whether the denial was supported by substantial evidence. While the notices were technically accurate in that the facility was in fact out-of-network, they provided only the “barest explanation” and did not engage with the participant’s actual claim. Moreover, ERISA’s full and fair review requirement was not met because the participant was not provided enough information to adequately prepare appeals. The administrator argued that the court should consider the entire administrative record for more context, but the court declined, noting that the administrator cannot “make up for blatant deficiencies” in the notices by pointing to other communications or offering a different rationale for the denial. The court directed the administrator to reconsider the claim and specifically address whether to grant a single case agreement for the facility, including consideration of the participant’s arguments about the adequacy of in-network offerings.
EBIA Comment: ERISA’s claims procedure regulations require that denial notices provide specific reasons for the denial, refer to specific plan provisions, and describe any additional information needed.
Denial notices demonstrating that a plan administrator has carefully considered and engaged with the participant’s specific claim might help avoid the need to expend resources on litigation and reconsideration of claim denials. For more information, see EBIA’s ERISA Compliance manual at Sections XXXIV.E.7 (“Notification of Adverse Benefit Determination (All Types of Health Claims)”) and XXXIV.H (“’Full and Fair Review’ Procedures for Group Health Claims and Appeals”). See also EBIA’s Self-Insured Health Plans manual at Section XXVI (“Claims and Appeals”).
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