Liability of an HMO if a health plan violates ERISA

[Guest Charlie Stevens]

Does anyone have any good resources concerning an HMO's obligation (if any) to comply with ERISA mandates such as COBRA and the Mental Health Parity Act? While the law appears to apply only to employers, participants sometimes go after the deeper pocket. Are there cases, statutes or regs out there that would impose vicarious liability on the HMO if the employer doest not implement a plan that does not measure up?

[KIP KRAUS]

Charlie:

It would be pretty difficult for an employer to comply with the Mental Health Parity Act if HMOs didn’t offer the coverage. I would think you could find out from the state Insurance Commission if HMOs are required to comply.

[Guest Charlie Stevens]

Kip, I agree with your comment, which certainly applies to COBRA as well. Nevertheless, if a participant sues "responsible parties" for failing to provide certain ERISA-mandatated arrangements in the health plan, isn't it the employer's responsbility as the plan sponsor rather than the HMO's. That is, the marketplace seems to call on the HMOs to respond to employers' needs to comply with requirements placed on health plans by ERISA, but is there actual ERISA/federal liability against the HMO (separate and apart from the employer's liability) if the plan is not in compliance?

Concerning state laws, there certainly are many mandated benefits that apply to HMOs, but if the mandate originates under ERISA, would the participant have a claim for relief under ERISA against the HMO?

[KIP KRAUS]

Charlie:

I’m not an attorney, but what you say makes sense. It’s always been my understanding that compliance with the Mental Health Parity Act is the employer’s responsibility, as is COBRA. Just a layman’s thought, but if the employer could demonstrate that he requested the HMO to comply with the MHPA might not the HMO be responsible for non-compliance?

Don’t know the answer to your last question and can’t even venture a guess.