May a health plan preclude assignment?

[Peter Gulia]

May an employer's ERISA-governed health plan make void a participant's attempted assignment of his or her right to get a payment concerning a covered medical service?

[J Simmons]

29 CFR §2560.503-1(b)(4) requires that the plan recognize a representative authorized by the employee for making claims and appeals, but permits the plan to impose reasonable procedures by which that authority must be established.

As for assignment of benefits and standing in court, see Spectrum Health v Valley Trust Parts, 2008 WL2246048, 44 EBC 1715 (WD Mich 2008) and Belmont Cmty Hosp v IBEW Local Union No. 9 & Outside Contractors Health & Welfare Fund, 737 FSupp 1034, 12 EBC 1636 (ND Ill 1990).

[Peter Gulia]

John Simmons, thank you for the good reminders.

Spectrum Health proceeded on Judge Quist's findings that "the Plan contains no limitation on, or requirements for, a valid assignment of benefits", and that the participant had made an assignment. Belmont Community Hospital held that ERISA does not preclude an assignment of a benefit under a health or other welfare plan. But it didn't decide whether a plan's terms could preclude assignment.

In Productive MD, LLC v. Aetna Health, Inc., 969 F. Supp.2d 901, 56 EBC 1841 (M.D. Tenn. 2013), the court found it unnecessary to consider whether an ERISA-governed health plan's anti-assignment provision was effective because a claim administrator had waived the provision.

The claims-procedures rule says a proper claims procedure must not "preclude an authorized representative of a claimant from acting on behalf of such claimant[.]" But there's a big difference between being an assignee who is the owner of a claim and being merely an agent who is permitted to help a participant pursue her claim. Among others, a representative can't require the health plan to make a benefit check payable to a person other than the participant.

In your experience, do you see health plans including and using anti-assignment provisions?

[Chaz]

Given the rash of out-of-network providers claiming that self-insured plans are inappropriately calculating U&C amounts payable to these providers, I think we will see more and more anti-assignment provisions. I am advising clients to include them.

I'm not sure whether a court has specifically determined yet whether they are enforceable (I haven't looked at the cases that Mr. Simmons cites) but your analysis above seems right to me.

[KJohnson]

Might want to look at this case from earlier this year, it collects cases from other Circuits.

http://law.justia.com/cases/federal/district-courts/new-jersey/njdce/3:2012cv07618/282676/17/

[Peter Gulia]

KJohnson, thank you!

In addition to anti-assignment provisions, is anyone seeing a health plan impose restrictions or conditions on who may act as a claimant's representative?

[GBurns]

Apparently, the 9th DCA has ruled that assignment is allowable. The 5th DCA is expected to rule similarly. Here is an article discussing the issue with links to the cases:

http://avym.com/obama-administration-advocates-network-providers-patients-federal-appeals-courts/?doing_wp_cron=1415290943.1787040233612060546875