In a dispute over reimbursements for COVID-19 testing, a district court concluded that the COVID-19 testing coverage mandate of the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was an implied ERISA plan term (Open MRI and Imaging of RP Vestibular Diagnostics, P.A., v. Cigna Health & Life Ins. Co., (D.N.J. May 18, 2022)). As a result, the court concluded that plan participants—and health providers on behalf of the participants—could sue under ERISA after a health insurer denied coverage for their COVID-19 testing.

For more information on the COVID-19 testing coverage mandate, see COVID-19 Testing, Vaccination, and Relief Provisions for Group Health Plans Toolkit.

As background, the FFCRA requires group health plans and health insurers offering group coverage to provide benefits for certain items and services related to testing for the detection of SARS-CoV-2 (the virus that causes COVID-19) or diagnosing COVID-19 during the ongoing public health emergency (PHE). The FFCRA requires plans and insurers to provide this coverage without cost-sharing (that is, deductibles, copayments, and coinsurance), preauthorization, or other medical management requirements. The CARES Act amended the FFCRA to expand the diagnostic items and services that plans and insurers must cover without cost-sharing, preauthorization, or medical management (see Practice Notes, COVID-19 Compliance for Health and Welfare Plans and COVID-19 Vaccine and Testing Requirements for Group Health Plans).

The health provider/plaintiff in this case furnished COVID-19 testing and related services totaling more than $1.5 million to covered health plan participants under plans insured and administered by a major health insurer. The insurer declined to pay the provider for its services, asserting (among other reasons) that the claims were duplicative and did not match the services billed. The provider sued the insurer for reimbursement under ERISA on behalf of the insured participants who (according to the provider) had assigned their plan-related rights to the provider (see ERISA Litigation Toolkit). The insurer moved to dismiss.

The insurer argued that the provider failed to state an ERISA benefits claim because the COVID-19 testing coverage mandate was not an express plan term. The provider, however, asserted that the coverage mandate was an implied plan term imposed under federal law (that is, the FFCRA and the CARES Act). Agreeing with the provider, the court reasoned that:

The court observed that use of the term "group health plan" from ERISA also signaled that the FFCRA was imposing obligations on ERISA benefit plans specifically—and that the mandate was an ERISA requirement. Moreover, the court noted that the FFCRA instructed the federal administrative agencies to apply the FFCRA's COVID-19 testing coverage mandate "as if" it was part of ERISA's group health plan requirements (see Group Health Plans and Health Insurance Toolkit).

Having concluded that the COVID-19 testing coverage mandate was a deemed part of ERISA plans, the court also held that insured health plan participants could sue under ERISA if an insurer denied coverage for COVID-19 testing. From there, the court concluded that the provider—acting on behalf of participant assignors—had stated a valid ERISA claim. The court rejected the insurer's argument that Congress, in granting enforcement authority to the agencies, displaced any private right of action to enforce the coverage mandate. The court noted that ERISA is a dual-enforcement statute, granting both an express private right of action to recover benefits and enforcement authority to the agencies. In the court's view, Congress did not displace the existing private right of action under ERISA by granting additional enforcement authority to the agencies in the FFCRA and CARES Act.

The court therefore denied the insurer's motion to dismiss the provider's claim.

Insurers have not had great luck this year seeking dismissal of claim denial challenges by participants and providers under the COVID testing coverage mandate. In March, for example, another district court allowed claims similar to the one at issue here to move forward (see also Court Permits Providers' COVID-19 Testing Claims Against Health Insurer to Proceed). Although the district court in the March 2022 ruling did not find an implied private right of action under the FFCRA and the CARES Act, it did permit the provider's claim under ERISA to advance (see Practice Note, ERISA Litigation: Causes of Action and Remedies Under ERISA Section 502 for Benefit and Fiduciary Breach Claims).