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C.P. et al. v. Blue Cross Blue Shield of Illinois,Case Number 23-4331, U.S. Court of Appeals for the Ninth Circuit
In C.P., the U.S. Court of Appeals for the Ninth Circuit overturned a grant of summary judgment in a class action in favor of transgender employee health plan participants who claimed that the insurance giant's denials of coverage for gender-affirming care discriminated against them. On appeal, a three-judge panel vacated and remanded the December 2023 ruling against Blue Cross Blue Shield of Illinois, which had established gender-affirming care exclusions in self-funded employer-provided health plans that it administered. The panel pointed to the recent U.S. Supreme Court ruling in U.S. v. Skrmetti, in which the high Court upheld a ban on gender-affirming care for minors in Tennessee. Based on that ruling, the panel reasoned, the district court should revisit its ruling.
Nonetheless, the panel upheld the district court judge's findings that the insurance company acting as a third-party administrator was liable for violating Section 1557 of the Affordable Care Act (ACA). That section of the ACA prohibits discrimination in healthcare, but until this ruling, it was unclear whether it applied to third-party administrators.
Carlisle v. The Board of Trustees of the American Federation of the New York State Teamsters Conference Pension and Retirement Fund, Case Number 25-511, U.S. Court of Appeals for the Second Circuit.
A panel of the U.S. Court of Appeals for the Second Circuit upheld the lower court's dismissal of a New York worker's proposed class action challenging the Teamsters retirement plan investments and fees. Robert Carlisle initially filed suit in October 2020, alleging that the plan's investment manager and actuary made poor investment choices and that the Teamsters trustees acquiesced to those choices. As a result, Carlisle claimed that the plan made risky investments, including private market investments, and incurred overly high plan management fees.
The Second Circuit panel found that while the complaint alleged that plan fiduciaries knew the risks of private market investments, it didn't state a claim for breach of the fiduciary duty of prudence under the Employee Retirement Income Security Act (ERISA). This ruling is of particular significance given the proliferation of ERISA class action lawsuits targeting employers' usage of service providers with ties to private equity.
Cheriese Johnson v. Reliance Standard Life Insurance Co., Case Number 23-13443, U.S. Court of Appeals for the Eleventh Circuit
A split panel of the U.S. Court of Appeals for the Eleventh Circuit reversed a lower court's decision in favor of Reliance Standard Life Insurance Co. against a former worker's dispute over long-term disability benefits. According to the appellate panel, the insurer wrongfully denied the worker's benefits claim in misapplying an exclusion for preexisting conditions.
Johnson was a human resources employee with The William Carter Co. when she sought disability benefits due to scleroderma, an autoimmune disorder. The insurer found that Johnson had a preexisting condition because she had received treatment for it during the three months before her long-term disability policy went into effect.
On appeal, Johnson argued that her scleroderma couldn't be a preexisting condition because she wasn't even diagnosed with it until after the three-month lookback period had ended. The panel's decision illustrates that although the Eleventh Circuit has a deferential standard when reviewing benefits claims, there are still limits to that deference.
Lewandowski v. Johnson and Johnson et al., Case Number 3:24-cv-00671, U.S. District Court for the District of New Jersey
A New Jersey federal district court judge has dismissed breach of fiduciary duty claims in an Employee Retirement Income Security Act (ERISA) lawsuit against Johnson & Johnson (J&J). Former and current employee and health plan participants filed a proposed class action in 2024 claiming that J&J charged excessive fees in its employee health plan, as well as failed to provide health plan documents when requested.
The judge ruled that the ex-workers had no Article III standing to bring claims for breach of fiduciary duty of prudence. The judge also held that the plaintiffs' allegations that J&J paid excessive fees to its pharmacy benefit manager (PBM) were too speculative without demonstration of a greater connection to higher premiums and out-of-pocket costs for plan participants.
Large corporations such as JPMorgan Chase & Co. and Wells Fargo already have cited the Lewandoski dismissal in similar proposed class actions attacking drug costs in their health plans through ERISA fiduciary breach claims.
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