Court: Third-Party Administrator Is Proper Defendant

MyHealthGuide Source: Bloomberg BNA Pension & Benefits Daily, 11/8/2013, www.BNA.com

Case: Nystrom v. AmerisourceBergen Drug Corp., 2013 BL 308000, D. Minn., No. 0:13-cv-00557-DSD-JJK, 11/6/13

Article referred by John Eggertsen, Esq. Attorney at Law, Eggertsen Consulting, P.C.

A health insurance plan participant can go forward with her challenge to Aetna Life Insurance Co.’s decision denying coverage for residential eating disorder-related treatment, the U.S. District Court for the District of Minnesota held in the above case.

Aetna moved to dismiss the participant’s claim on the grounds that it was neither the plan nor the plan administrator, and therefore couldn’t be a proper defendant under the Employee Retirement Income Security Act. The participant argued that because Aetna “exercised control over the Plan’s decision-making and claims processes,” it could be held liable as an ERISA defendant.

The court agreed with the participant. It found that the relevant statutory language “imposes no explicit limitations on persons or entities that may be defendants.” Rather, third-party administrators such as Aetna can be proper defendants when they exercise “actual control” over the benefit claims in question, the court said.

Here, the participant alleged that Aetna “exerted considerable control over the certification decision-making and appeals process” and that Aetna “made the ultimate decision to deny coverage.” These allegations of control were sufficient to survive Aetna’s motion to dismiss, the court concluded.

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