Law360 (January 31, 2025, 7:50 PM EST) — The en banc Eleventh Circuit will consider whether federal anti-discrimination law bars a Georgia county health plan from refusing to cover a worker’s gender-confirmation surgery while the Second Circuit will hear from an NBA referee defending his win in a pension payout case.
Here, Law360 looks at these and four other upcoming oral arguments benefits attorneys should have on their radar.
COVID-19 Testing Reimbursements Sought at 2nd Circ.
A Second Circuit panel will hear an appeal from a medical provider seeking to revive claims it was owed reimbursements for COVID-19 testing from a union employee benefit plan in a dispute over the extent of the Employee Retirement Income Security Act’s administrative exhaustion requirements.
A three-judge panel has set oral arguments for Feb. 3 in the appeal from Murphy Medical Associates LLC, practice owner Steven A.R. Murphy and Diagnostic and Medical Specialists of Greenwich LLC, three entities collectively identified in the suit as the Murphy practice.
The Murphy practice seeks to recover ERISA plan benefits from the 1199SEIU National Benefit Fund and sought appellate review after a New York federal court dismissed the case in June 2024 for failure to plead administrative exhaustion. The practice has disputed payment for claims worth approximately $576,000, according to an amended complaint from May 2023.
The Murphy practice said in its appellate brief filed in September that Second Circuit precedent backs its argument that if there’s a showing of futility, a claimant can be released from ERISA’s strict requirements on administrative exhaustion.
The practice also argues on appeal that the denials of COVID-19 testing claims violated the Families First Coronavirus Response Act and the CARES Act, which Congress passed in 2020 to respond to the coronavirus pandemic.
The union fund, meanwhile, argued in its brief filed with the appellate court in October that the district court’s order wasn’t erroneous because the practice didn’t do enough to plead that engaging in the administrative process for its claims would have been futile.
“If such meager allegations were deemed sufficient for benefit claims under ERISA §502(a)(1)(B) to proceed, the entire purpose of requiring exhaustion of administrative appeals prior to proceeding to litigation would be defeated,” the union fund’s brief said.
The case is Murphy Medical Associates LLC v. 1199SEIU National Benefit Fund, case number 24-1880, in the U.S. Court of Appeals for the Second Circuit.
Providers Want 5th Circ. to Revive Emergency Claims
The Fifth Circuit will take up a suit by a group of Texas-based medical providers seeking higher reimbursement for emergency medical claims under employee benefit plans and private insurance Blue Cross Blue Shield affiliates outside Texas.
A panel is set to hear arguments Feb. 3 in the providers’ appeal, which seeks to revive allegations that the Blue Cross affiliates systematically underpaid tens of thousands of claims from physicians providing emergency care.
The providers argued that a district court wrongly granted summary judgment to the Blue Cross affiliates and shouldn’t have concluded that the providers were required to exhaust the administrative process for their claims. They also argued on appeal that the ERISA-regulated plans subject to their suit did not require exhaustion because the plans were in defiance of their own terms with regard to reimbursement for emergency medical treatment claims.
Schyler Burney, an appellate associate at Bradley Arant Boult Cummings LLP who previously clerked at the Fifth Circuit and works on healthcare litigation, said she’s eager to see how the appellate court addresses standing and administrative exhaustion issues in the case.
She took note of the multiple arguments on appeal, with standards being disputed regarding “a challenge on provider standing and the requirements for executing valid assignments, and then also the exhaustion of administrative remedies.”
The providers argued in their appellate brief in July that the district court erred when it concluded providers lacked standing to bring certain claims, citing anti-assignment provisions in patients’ healthcare plans, because Fifth Circuit precedent has been found to nullify those provisions as applied to providers in certain cases. They also argued that Fifth Circuit precedent supports reversing the lower court’s finding that administrative exhaustion of their claims was required, for both ERISA and non-ERISA plans.
The case is Angelina Emergency Med v. Blue Cross, case number 24-10306″>24-10306, in the U.S. Court of Appeals for the Fifth Circuit.
11th Circ. Takes Up Trans Deputy’s Surgery Fight
The en banc Eleventh Circuit will consider whether a Georgia county’s exclusion on coverage for a transgender deputy’s gender-affirming surgery violates federal employment discrimination laws, in a case where the appellate court has permitted the state of Alabama to argue as an amicus in support of another state’s county.
The full appellate court has set arguments for Tuesday in the petition from Houston County, Georgia, seeking to overturn an appellate panel’s 2-1 decision from May that found the county health plan’s refusal to cover a vaginoplasty for Houston County Sheriff’s Office employee Anna Lange abrogated Title VII of the Civil Rights Act. Lange, a deputy sheriff who has attained the rank of sergeant, has worked in law enforcement for more than two decades and first sued in 2019. The Eleventh Circuit agreed in August to hear Lange’s appeal en banc.
The county and Houston County Sheriff Cullen Talton appealed to the Eleventh Circuit after Lange won an injunction against her employer’s exclusion in October 2022. Prior to that ruling, the district court awarded her summary judgment on discrimination claims in June 2022, and a jury verdict in September 2022 awarded her $60,000 in emotional damages. The trial court also specifically directed processing of any claims for Lange’s previously denied vaginoplasty, denying in March 2023 a last-minute attempt by the county and Talton to avoid coverage while the appeal was pending.
The appellate panel’s majority ruled that Title VII protected coverage for Lange’s surgery. But U.S. Circuit Judge Andrew L. Brasher in a dissent sided with the county’s argument on appeal that the exclusion wasn’t based on sex but rather on a specific treatment — gender-affirming surgery — for a specific diagnosis, gender dysphoria.
Sarah Raaii, a partner at McDermott Will & Emery LLP who advises on employee benefits and healthcare issues, has been observing developments in the appeal closely. She highlighted how a ruling upholding the panel’s decision could conflict with gender-affirming care policy that may develop under President Donald Trump’s administration.
“With the incoming administration taking a stance against gender-affirming care, we’re closely watching pending litigation like Lange,” Raaii said. “It’s possible that at least some courts could decide in favor of participants seeking gender-affirming care, potentially clashing with Trump administration initiatives.”
Raaii said federal agencies appear likely to revisit rules implementing the Affordable Care Act’s nondiscrimination-in-healthcare provision Section 1557 — which the Biden administration finalized in April.
Trump has already signaled he’s against Biden’s rule in multiple executive orders, including one on Jan. 20 that declared U.S. policy will only recognize two sexes. Not all employer health plans are subject to Title VII and ACA Section 1557, and attorneys as a result have to closely monitor the overlapping regulations.
“Early indications are that [federal agencies] will probably revisit the ACA Section 1557 regulations, as they have during the last few presidential administrations, but Lange focuses on Title VII, so it may set a precedent for other plaintiffs,” Raaii said.
The case is Lange v. Houston County, Georgia et al., case number 22-13626″>22-13626, in the U.S. Court of Appeals for the Eleventh Circuit.
9th Circ. Tackles ERISA Disability Suit
The Ninth Circuit will take up questions about how federal benefits law and state laws intersect in a small-business owner’s long-running fight with her insurer over long-term disability benefits.
A three-judge panel has set arguments for Tuesday in the dispute from insurance agency owner Jill Steigleman, who sued Symetra Life Insurance Co. for contract breach and bad faith over handling of her claim. Steigleman seeks to overturn an Arizona district court’s decision handing a win to the insurer in November 2023, following a bench trial that determined state law claims in the suit were preempted by ERISA.
The Ninth Circuit revived the case in 2022, overturning the lower court’s dismissal for further discovery on whether the plan was governed by ERISA. The case drew attorneys’ attention in 2021 because an implication of the district court’s ruling to toss the case was that a business owner’s purchase of long-term disability protection could inadvertently create an ERISA-governed plan.
Steigleman, who typically had one or two people working for her, disputed that her long-term disability plan was regulated by ERISA and argued in a brief in June that the district court erred in concluding her disability coverage was “part of an ERISA-governed plan of her own inadvertent making.”
Symetra’s September brief sought to affirm the district court’s ruling, pointing to testimony in the record from Steigleman’s employees that said she provided them benefits.
“Steigleman’s agency established or maintained an employee welfare benefit plan for Steigleman and the agency’s other employees,” Symetra’s brief said.
The case is Steigleman v. Symetra Life Insurance Co., case number 23-4082, in the U.S. Court of Appeals for the Ninth Circuit.
Yacht Co. Asks 6th Circ. to Revive Health Fee Claims
The Sixth Circuit will weigh reviving a Michigan boat manufacturing company’s claims against Blue Cross Blue Shield of Michigan, in a suit alleging that the third-party administrator of the company’s self-funded health plan breached ERISA fiduciary duties and caused prohibited transactions.
A three-judge panel has set oral arguments for Thursday in the appeal from Holland, Michigan-based Tiara Yachts Inc. seeking to reverse a Michigan federal court’s decision to toss the case with prejudice in February 2023. The company first sued in July 2022, alleging that the Michigan Blue Cross affiliate breached ERISA fiduciary duties through a scheme to inflate claim expenses and then claim savings on the back end.
The company alleged that Michigan Blue Cross treated certain out-of-network providers like in network providers and paid their claims in full at the rate charged under a so-called shared savings program. But the arrangement allowed Blue Cross to keep 30% of avoided or recovered payments instead of passing the savings on to self-funded health plan customers.
Benefits and appellate attorneys are closely watching the case because litigation against health plan administrators is on the rise. Attorneys say one driver is that employers now have more information about how third-party administrators run their health plans as a result of increased transparency requirements on insurers under the No Surprises Act, which was passed as part of the 2021 Consolidated Appropriations Act.
“I think what will be very interesting to see is how the Sixth Circuit views this allegation that Blue Cross Blue Shield of Michigan is a plan fiduciary,” said employer-side attorney Anne Tyler Hall, managing partner at Hall Benefits Law.
Hall also highlighted how the employer alleged that BCBS of Michigan wrongly charged the yacht company’s self-funded health plan for overpaying claims and then claimed savings from the charged fees.
“I think this is fascinating — Tiara Yachts is saying, ‘Blue Cross Blue Shield of Michigan, you charged us for overpaying. You charged us 30% of these savings that you should have never paid from the plan anyway.'”
Scott Burnett Smith, founder and chair of Bradley Arant Boult Cummings LLP’s appellate litigation practice group, said he thought the appeal had “real merit to it” and highlighted how the U.S. Department of Labor filed a brief in the case in support of the yacht company. The DOL will also participate in arguments.
“For a third-party administrator of a health plan who is the only one who receives the claims, administers the claims and pays the claims to get out on the grounds that they won’t act as a fiduciary when they do that? That would be a surprising outcome,” Smith said.
The case is Tiara Yachts Inc. v. Blue Cross Blue Shield of MI, case number 24-1223, in the U.S. Court of Appeals for the Sixth Circuit.
Former NBA Ref’s Pension Dispute to Be Heard by 2nd Circ.
A retirement plan for NBA referees will ask the Second Circuit to overturn a fired referee’s trial court win on claims he was owed a lump-sum pension distribution upon losing his job after he refused to get vaccinated for COVID-19, which the league plan argued shouldn’t be paid until it’s clear he’s not returning to work.
A three-judge panel has set arguments for Feb. 11 in the appeal from the Pension Committee of the National Basketball Association Referees Pension Plan, which seeks to overturn a New York federal court’s ruling from March 2024 that found referee Kenneth Mauer was entitled to an immediate distribution.
Mauer first sued in June 2023. He worked for the NBA from 1986 until he was suspended before the 2021-22 season and ultimately fired in September 2022 for not complying with the inoculation mandate.
The NBA plan argued in its brief filed in September that the distribution shouldn’t be issued yet because Mauer is disputing his termination in another suit and that the district court’s decision to order otherwise defied Supreme Court and appellate precedent.
The league said interpreting the plan to require distributions when an employee is disputing their termination was “clearly not what the plan intended and could lead to serious tax disqualification issues.”
The case is Mauer v. National Basketball Association, case number 24-1405, in the U.S. Court of Appeals for the Second Circuit.
–Editing by Bruce Goldman and Emma Brauer.
Hall Benefits Law, LLC
