A recent decision by the U.S. Court of Appeals for the Seventh Circuit allows insurance companies providing benefits under insured employee benefit plans to be sued under the Employee Retirement Income Security Act, according to a report from law firm McGuireWoods.
In Larson v. United Healthcare Ins. Co., the plaintiffs alleged required copayments under their employer-sponsored healthcare plans, underwritten by the defendant insurance companies, violated a Wisconsin state law mandating insurers cover chiropractic care and other medical care equally. Because the required copayments were often equal to or sometimes more than the cost of relatively inexpensive chiropractic treatment, the plaintiffs argued the plan illegally shifted the cost of such care to the employees, according to the report.
After the suit was dismissed by the U.S. District Court for the Western District of Wisconsin partly on the grounds the insurance companies were not the right defendants, the Seventh Circuit affirmed the insurance companies were the right defendants as the insurers decided the eligibility and the benefits, according to the report.
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