First Circuit Reverses Dismissal of Mental Health Parity Claim Against Group Health Plan

On January 31, 2022, the US Court of Appeals for the First Circuit (First Circuit) reversed the District Court in a case that centers on the Mental Health Parity and Addiction Equity Act (MHPAEA). In N.R. v. Raytheon Company, the plaintiffs brought a case against Raytheon, United Healthcare, and the plan’s administrator on behalf of their minor child after the plan refused to pay for the child’s speech therapy. The plaintiff’s main argument (in count 3) was that the plan’s exclusion of non-restorative speech therapy for autism spectrum disorder (ASD) violated MHPAEA by imposing separate treatment limitations on mental health services.

As a reminder, MHPAEA mandates that plans covering both medical/surgical and mental health/substance use disorder benefits may not impose more restrictive coverage limitations on mental health and substance use disorder benefits.

At the district court level, the defendants moved to dismiss the case, arguing that MHPAEA was not violated because the non-restorative exclusion applies to all types of conditions — including medical/surgical ones. The district court agreed with the defendants and dismissed the case.

However, the First Circuit reviewed the case on a de novo basis, assuming all well-pleaded facts to be true and analyzing those facts in the kindest light to the plaintiff’s case (as precedence required). In so doing, the First Circuit concluded that the plan’s exclusion of non-restorative speech therapy for ASD could violate MHPAEA. They specifically pointed to situations where the plan seemed to cover at least some procedures that would give rise to non-restorative therapy for physical conditions, making it plausible that the exclusion of non-restorative therapy applied only to mental health conditions. As such, the First Circuit concluded that the plaintiffs sufficiently pled the argument that the plan violates MHPAEA, and they reversed the district court’s dismissal of count 3.

The First Circuit also dealt with three other claims. Count 1 is the only count with which the court agreed with the district court, and it was a claim brought against the plan’s fiduciaries that could only be read (by statute) to insinuate that there had been a loss to the plan. Since the losses in this case were only to the individual plan participant, this claim dismissal was upheld by the court.

The First Circuit reversed the dismissal of counts 2 and 4, which addressed the participant’s loss of benefits due to him under the terms of the plan and the defendant’s failure to disclose documents requested by the plan participant, respectively. These counts, along with count 3, were reversed and remanded to the district court to be decided on their merits.

Ultimately, this case serves as a reminder that mental health parity and plans’ compliance with MHPAEA is being addressed by the government and in lawsuits across the country. Employer plan sponsors should work with their service providers to ensure MHPAEA compliance.

N.R. v. Raytheon Company »