Northern California Record

Sunday, July 21, 2019

Judge green-lights Kaiser's motion to strike two claims in suit over speech therapy coverage


By John Suayan | Apr 18, 2019

SAN FRANCISCO – U.S. District Judge Edward M. Chen of the Northern District of California granted Kaiser Foundation Health Plan’s motion to dismiss a couple of claims fielded in a lawsuit over allegations it unlawfully changed the terms of a woman’s plan in violation of the Employee Retirement Income Security Act of 1974.

On April 4, Chen ruled that plaintiff Ashley Cromwell’s claims in relation to 29 U.S. Codes Section 1132(a)(3) and Section 1132(a)(2) against Kaiser be dismissed while retaining a third claim pursuant to 29 U.S.C. Section 1132(a)(1)(B).

Cromwell claims she and her family receive benefits through a plan sponsored by her employer, Covenant Care and that Kaiser adjudicates and funds the benefits administered under the plan.

The ruling states that the plaintiff’s daughter is autistic and received speech therapy treatment for her autism, which the plan initially provided “on the same terms as it provided applied behavioral analysis therapy and in-patient treatment.”

Kaiser reportedly sent a letter to Cromwell informing her that her 2018 coverage would subject speech therapy treatment “to a $2,000 deductible, before the $20 co-payment process would kick in,” the letter states.

The letter indicated that the terms of the health benefits plan were changed because, “[u]nder California Senate Bill 946, physical, occupational and speech therapy aren’t considered mental health services. Consistent with this state law, these services are now covered under your plan’s standard physical, occupational and speech therapy benefits,” according to the ruling.

According to Cromwell, the new plan terms conflict with the California Mental Health Parity Act (CMHPA). The 11-page order, however, says that although the petitioner “implicates an alleged conflict with California law in her complaint, the causes of action pled therein all assert a violation of ERISA, and not any state law in particular, including the CMHPA.”

In response to Cromwell’s Section 1132(a)(3) claim that Kaiser breached its fiduciary duty under ERISA, the order states that Kaiser “did not act as a fiduciary” when amending the plan and dismissed that claim. 

Chen also junked the plaintiff’s Section 1132(a)(2) claim because it “requires that there be an injury to the plan and the complaint fails to allege such an injury.”

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