R. v. United Healthcare Insurance Company

Background

In 2020, M.R.’s stepdaughter received inpatient mental-health treatment at Evoke, a wilderness therapy program. M.R.’s health-insurance provider denied coverage. M.R., individually and on behalf of J.S., a minor, sued United Healthcare Insurance Company and other defendants, alleging that the denial violated the Mental Health Parity and Addiction Equity Act of 2008, which generally prohibits more restrictive coverage standards for mental-health treatment than for comparable medical and surgical benefits.

Defendants moved to dismiss. They argued that the lawsuit was untimely under the insurance plan’s contractual limitations period, that M.R. had not adequately pleaded a claim under the Parity Act, and that she had not adequately pleaded claims for statutory penalties against the defendants. The magistrate judge recommended denying the motion except as to statutory-penalty claims against defendants other than Pfizer. After defendants objected, Judge Woods reviewed the challenged portions of the recommendation.

Timeliness

The court held that M.R.’s action could proceed even though it was filed outside the plan’s one-year contractual limitations period. A federal regulation required the defendants to notify M.R. of that limitations period in the letters denying coverage. The court concluded that M.R. adequately pleaded that defendants failed to provide that notice.

The court rejected defendants’ argument that M.R.’s alleged knowledge of the limitations period made the case timely only through equitable tolling, a doctrine that can extend a filing deadline in some circumstances. The court agreed with the magistrate judge that M.R. did not need equitable tolling because defendants’ regulatory violation waived or made unenforceable the contractual limitations period.

Parity Act claim

The court held that M.R. adequately stated a claim under the Parity Act. To plead such a claim, she had to allege that the plan was covered by the Act, provided both medical and mental-health benefits, imposed a treatment limitation that was more restrictive for mental-health treatment than for medical treatment, and applied the limitation to benefits in the same classification.

The court agreed that M.R. adequately alleged the required difference in treatment by claiming that mental-health treatment at wilderness therapy programs was categorically excluded while comparable medical treatment was not. The court explained that a plan’s exclusion may violate the Act if it is applied more strictly in practice to mental-health benefits, even when the exclusion’s wording appears to apply equally to mental-health and medical benefits.

The court also held that whether wilderness therapy was analogous to skilled-nursing-facility care was a factual question that could not be resolved on a motion to dismiss. At that stage, the court generally had to accept the complaint’s factual allegations as true and could not resolve factual disputes based on defendants’ contrary factual assertions.

Statutory penalties against Pfizer

The court held that M.R. adequately stated a claim for statutory penalties against Pfizer under the Employee Retirement Income Security Act, or ERISA. That provision can impose personal liability on a plan administrator that fails to provide requested plan documents within the required period.

Although M.R. sent her request to the plan sponsor’s address rather than the plan administrator’s address, the court agreed that Pfizer was both the plan sponsor and the plan administrator. Pfizer also responded within the statutory 30-day period on plan-administrator letterhead, which supported treating the request as an enforceable request under ERISA. The court rejected defendants’ technical argument that the address issue defeated the claim.

Disposition

The court accepted and adopted the magistrate judge’s report and recommendation in full. Defendants’ motion to dismiss was granted in part and denied in part. The motion was granted as to M.R.’s statutory-penalty claims against defendants other than Pfizer. The motion was denied as to M.R.’s other claims, including the Parity Act claim and the statutory-penalty claim against Pfizer. The clerk was directed to terminate the pending motion.