Federal Court Determines That Autism Treatment Exclusion Violates Mental Health Parity and Addiction Equity Act

On March 5, 2021, a California federal court ruled in Doe v. United Behavioral Health that UnitedHealth violated the Mental Health Parity and Addiction Equity Act (Parity Act) and federal benefits law by refusing to pay for a common form of autism treatment.

Plaintiff Jane Doe filed the suit on behalf of her son against UnitedHealth, which was the administrator of the employer-sponsored health plan at Wipro Ltd., where her son’s father worked until 2020. She alleged that UnitedHealth had breached its fiduciary duty under ERISA and violated the Parity Act when it refused to cover a common form of autism therapy known as applied behavior analysis (ABA) from 2017 to 2019. 

The Parity Act requires that coverage of mental health treatments under group health plans cannot be more restrictive than medical or surgical treatments, and that plans cannot include exclusions that only apply to mental health. In her complaint, Doe noted that UnitedHealth did not have comparable exclusions for medical/surgical treatments.

UnitedHealth argued that it was a third-party administrator, not a fiduciary, and therefore could not supersede the plan’s terms. The court disagreed, stating that UnitedHealth’s power to approve or deny claims made it a fiduciary, and its duties as a fiduciary overrode plan terms.

UnitedHealth also maintained that excluding the ABA treatment was not a violation of the Parity Act, arguing that the Act targeted quantitative or financial limits for mental health treatment. The court again disagreed, finding that the Parity Act language clearly prohibits the plan’s exclusion of the ABA treatment for a mental health condition.

In making its ruling, the court said, “The exclusion carves out and rejects from coverage a core treatment for Autism: ABA therapy. As Doe correctly highlights, there are no comparable medical/surgical exclusions in the Wipro Plan. Thus, the exclusion, which excludes coverage for the primary treatment modality for a mental health condition, violates the plain language of the statute.”

In addition, the court said that UnitedHealth’s enforcement of the exclusion violates ERISA.

HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment legal compliance needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 678-439-6236.

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Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.

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