Washington Court of Appeals Rules Against Discriminatory Insurance Policy Exclusion

Washington State law generally prohibits unfair discrimination by insurance companies. But everyone knows that some degree of discrimination is part and parcel of the insurance business.

For example, auto insurers discriminate against young people by charging them higher premiums to reflect the risk presented by young drivers. Life insurers discriminate against smokers by charging them higher rates to reflect the health hazards of smoking. Homeowners insurers discriminate against folks in wildfire-prone areas by charging them higher premiums to reflect the increased risk of fire.

For that reason, the Washington Law Against Discrimination, which generally bars insurance companies from discriminating against policyholders, has an exception for so-called “fair discrimination” (which you could be forgiven for thinking is an oxymoron).

So when does the insurance company hedging against the increased risk presented by certain demographics of policyholders cross the line from reasonable underwriting practices to unlawful discrimination?

The Washington Court of Appeals’ recent decision in Herzog v. Kaiser Foundation Health Plan of Washington is an interesting example. Herzog sued his health insurer, Kaiser, for denying coverage for drugs his doctor prescribed to combat his obesity.

Nobody disputed that Kaiser’s insurance policy contained an exclusion for any kind of drug treatment for obesity, unless it was necessary to treat a secondary diagnosis such as diabetes.

But Herzog alleged that the exclusion violated the Washington Law Against Discrimination and Consumer Protection Act. Herzog claimed that obesity is a disability. Washington law generally prohibits insurers and other companies from discriminating against disabled persons.

Kaiser argued that its obesity treatment exclusion was expressly permitted under Washington’s insurance regulations. Basically, Kaiser pointed to rules showing that health insurance plans are not required to include services for obesity or weight loss in their general essential health benefits that benchmark health plans are required to offer.

Herzog pointed out that those rules have the narrow purpose of establishing benefit minimums. They did not, according to Herzog, act as an exception from general rules against disability discrimination.

The Court of Appeals agreed. It emphasized that the law permits insurers to exclude treatments for disabilities for valid reasons, like that they are not medically effective, not cost-effective compared to other treatment, etc. But insurers cannot exclude treatments for disabilities simply because they treat disabilities.

Nor did the fact that the Kaiser plan met the Affordable Care Act’s requirements for minimum essential health benefits permit the discriminatory exclusion. According to the appellate court, the regulations Kaiser relied on were intended to ensure that health plans that do not meet the requirements for essential health benefit coverage received a lower actuarial rating. They were not intended to immunize insurers who offer more than the minimum essential health benefits against claims their benefit plans contain discriminatory exclusions.

The ruling is “unpublished”, meaning it’s not precedent that binds courts in future decisions. But it is an interesting example that Washington courts are unwilling to find insurers’ compliance with minimum health plan regulations is a get-out-of-jail-free card when their health plans violate the law.

What to Do When My Employer Won’t Talk to Me About My Benefits?

ERISA requires communication about employees’ benefits. Unfortunately, sometimes that doesn’t happen. Employees might go to HR with questions about what health, disability, life, or other benefits their company provides, what the insurance policies require, and what procedures exist for them to claim their benefits, only to get inaccurate information or no meaningful response at all.

Here’s where ERISA comes in. ERISA requires that basically all of the employee benefit plan documents that provide information about what benefits employees have and how to claim those benefits be disclosed to participating employees.

So if you have a company health or disability insurance plan, for example, that falls under ERISA, the company is typically required to disclose information upon your request.

The devil is in the details, though. First, the disclosure rule only applies to plans governed by ERISA. If you get benefits through a non-ERISA plan (for example, public employer benefits often aren’t governed by ERISA), then ERISA can’t help you get information. You might have protection under some other law, but not ERISA.

Second, only written requests typically get the benefit of ERISA’s rule requiring disclosure. Asking HR over the phone might get you help voluntarily, but it usually won’t trigger ERISA’s requirement to disclose information.

Third, requests must generally go to the right person to trigger ERISA’s disclosure rule. That person is usually the “plan administrator.” This person (often a corporation) is usually identified in a Summary Plan Description or similar document. Plan administrators are also required to be identified in the annual reports that ERISA plans must file with the department of labor. A request sent to someone besides the plan administrator generally doesn’t trigger any duties under ERISA.

Fourth, only requests for specific information fall under ERISA’s disclosure requirement. ERISA requires that the benefit plan disclose (basically) the documents that say what your benefits are and what you have to do to get them. So if your claim is being processed by an insurance company, the insurer’s records about your claim probably don’t have to be disclosed by the ERISA plan itself. They likely have to be disclosed to you by the insurance company under a separate part of ERISA. For instance, if your claim is denied, ERISA would often require the insurance company or other entity that made the decision to provide all the information relevant to the decision. But that request typically goes to the decision maker, which is often a separate entity from the employer.

If this all seems confusing, you’re not alone! But the good news is that, when a request falls under ERISA’s disclosure provision, the rule has teeth.

ERISA plans that fail to disclose the appropriate documents in response to a proper request can have to pay the participating employee daily monetary penalties as well as the attorneys’ fees the employee incurred in bringing suit to obtain the documents that should have been disclosed.

In short, ERISA’s disclosure rule is an example of the statute at its best and worst: it provides employees with an important right–transparency–with a real enforcement mechanism, but tacks on enough exceptions and hoops to jump through that many folks find the rule almost as frustrating as the lack of disclosure the rule is supposed to remedy.

Ninth Circuit Reverses Dismissal of Health Insurance Lawsuit, Finds Insurance Company Violated ERISA

One of ERISA’s protections for insurance policyholders is the right to a meaningful dialogue with the insurance company about the claim. If the insurance company denies your claim, it must tell you why. If the company says that more information is needed before paying the claim, it must say so, and tell you what you need to provide in order to receive coverage.

This rule applies to any type of insurance governed by ERISA. But it is particularly important in health insurance claim disputes. Health claims are often decided in opaque explanations of benefits that shed little light on what the company is refusing to pay and why.

This was the situation in the Ninth Circuit Court of Appeals’ April 13, 2026 ruling in Campbell v. UnitedHealthcare. Campbell sued after UnitedHealthcare refused to pay her medical bills. After denying the claim, UnitedHealthcare failed to tell Campbell specifically why it refused to pay, refused to say what she needed to do in order to receive payment, and withheld documents about the claim that could have helped Campbell obtain coverage.

The trial court dismissed Campbell’s lawsuit, but the Ninth Circuit reversed. The appeals court found that UnitedHealthcare violated ERISA by refusing to meaningfully communicate with Campbell about the denial. The insurance stonewalled Campbell with “cookie-cutter” letters that ignored her arguments why her procedure was covered and just repeated the same rationale that her treatment was “not documented as performed.”

Further, the Court found UnitedHealthcare violated ERISA when it failed to tell her what additional information she needed to submit in order to get coverage. And, the insurance company failed to give Campbell the documents about her claim including those that evidenced her procedure should have been covered.

So, the Ninth Circuit sent the case back to the lower court with instructions to enter a ruling in Campbell’s favor. That decision is “unpublished,” meaning it is not binding precedent in future disputes. But it is a good reminder that ERISA’s procedural protections are important and that courts will enforce them.

Five Red Flags in Disability Insurance Claims

We often discuss issues with ERISA-governed disability insurance. Certain issues tend to crop up regularly when these issues lead to litigation. Here are the top five.

1: The company ignores your doctors.

Typically the first step in making a disability insurance claim is having the doctor complete a form identifying your diagnosis, the resulting symptoms, and their impact on your ability to work. This makes sense. After all, when a person can’t work because they’re sick or injured, the doctor treating them usually has all the firsthand medical knowledge.

So, ERISA requires that the insurance company consider the claimant’s treating doctor’s opinions. Of course, the insurance company doesn’t have to pay benefits just because your doctor says you can’t work. Sometimes the doctor doesn’t understand the person’s job duties or the insurance policy terms have other requirements besides medical evidence that aren’t met. But the company can’t just ignore your doctor.

So if the company can’t seem to engage with your doctor’s opinions, it’s a good sign something is wrong. Sometimes it’s obvious: the insurer just doesn’t address your doctor’s conclusions. Other times, it’s more circumspect: the insurer pays its own doctor to perform a medical review that summarizes your doctor’s opinions and then makes the one-sentence conclusion that the insurer’s doctor disagrees, without providing any explanation.

Regardless of how it’s done, an insurer that disregards your doctor without engaging with their opinions in detail probably isn’t doing the right thing.

2: The company ignores your job duties.

The details of a person’s job can be just as important to a disability claim as the medical evidence. Many disability insurance polices pay benefits if you can’t perform your “own occupation,” as opposed to being totally disabled from any work. That’s important protection that costs extra. Many skilled professionals have demanding jobs that a person could be disabled from performing without being totally unable to work. This makes the claimant’s job duties a very important part of a robust investigation in a disability insurance claim.

So if the company doesn’t engage with your job duties when the claim is under an “own occupation” insurance policy, that’s a big problem. This often happens in claims involving skilled professionals. A software engineer, for example, has demanding mental and organizational duties. If she develops an autoimmune disorder that leaves her too exhausted and in too much pain to perform her duties and makes a disability insurance claim and the insurance company only evaluates the physical demands of her job–i.e., the ability to sit at a desk and use a computer–the company misses the big picture.

This also crops up in cases involving medical conditions that impose intermittent symptoms. Often, a person becomes disabled due to a disease that manifests symptoms occasionally and unpredictably. For example, a person with heart disease might feel fine Monday thru Thursday and then have crippling pain and shortness of breath that keeps them from doing much of anything on Friday. If that person can’t reliably commit to attending their job full-time, they’re likely disabled within the meaning of most insurance policies, which provide a person is disabled if they can’t perform their job duties with “reasonable continuity.” After all, most jobs require you to be able to do your job full time and on a regular schedule.

If the company ignores that reliable attendance is among the person’s job duties, it can lead to a wrongful denial of coverage. The company might conclude that a person can still perform their job duties when they’re asymptomatic without addressing the fact that they can’t commit to regular attendance because they can’t predict when their symptoms will flare up. No boss wants an employee who can’t show up for work reliably.

3: The company declines to investigate.

ERISA requires the insurance company to reasonably investigate benefit claims for a good reason: turning a blind eye to the facts is an easy way to deny valid claims. Often, the company will deny a claim for lack of evidence–but they won’t make any effort to obtain it. For example, the company might say “we can’t pay your claim without additional medical records.” If they don’t make an effort to obtain the information they say is missing, it’s probably a sign that the company is more interested in finding excuses not to pay the claim than it is in performing a legitimate investigation.

4: The company cherry-picks irrelevant evidence.

Since disability claims depend on the intersection of work capacity and symptoms from illness or injury, a person could reasonably expect their disability insurer to focus on evidence relevant to how their symptoms impact their ability to work. Unfortunately, that isn’t always the case.

Often, the company will cherry-pick facts that aren’t relevant to how your symptoms impact your job. It’s distressingly common to read a letter denying a disability insurance claim that ignores the medical evidence of disability and instead recites facts that have nothing to do with that evidence.

Sometimes this happens with the analysis of medical records. A person might visit their doctor to discuss a new diagnosis of an autoimmune condition that leads them to make a disability insurance claim. That visit might include discussion about the test results leading to the diagnosis, the likely prognosis, the symptoms that the person can expect, and possible treatment. If the insurance company ignores all that and instead quotes only the sentence of the doctor’s note that reflects the patient was in no acute distress during the visit, that’s a bad sign. It shows the company is looking only for evidence that could permit it to deny the claim.

Other times, it might happen with ancillary facts about a person’s activities. Let’s say a person’s autoimmune condition keeps them at home most days due to exhaustion and pain. They might report to their disability insurer that they barely leave the house, rely on friends and family for grocery shopping, can no longer play sports, and limit their physical activity to a walk around the block once a day. A denial letter from the insurance company ignoring this and reciting that the person must be healthy because they can walk is a sure sign that the company isn’t doing the right thing.

5: The company doesn’t communicate what it wants.

ERISA requires the insurance company to have a meaningful conversation with claimants about the insurance claim. If the company thinks that something more than what’s been submitted is necessary in order to pay benefits, it must say so.

So when the company denies coverage and won’t say what’s missing, that’s a red flag. Too often, coverage is denied in a letter that summarizes the person’s treatment and then arbitrarily concludes there is insufficient evidence of disability. If the company doesn’t specify what evidence it says is missing, that’s a bad sign.

For example, a knowledge worker with severe mental health diagnoses might become unable to work due to cognitive impairment and make a disability insurance claim. The company might deny the claim because there is insufficient evidence of cognitive impairments. A company trying to do the right thing will tell you what additional evidence is needed. They might request results from specific testing. Or, they might request information from your employer about your performance.

What an insurance company acting in good faith probably won’t do is dismiss the claim with a one-sentence conclusion of “insufficient evidence” without telling you what additional evidence they need. If that happens, it’s a red flag.

Will 2026 Bring Meaningful Regulatory Updates to Washington Policyholders?

Washington’s Office of the Insurance Commissioner has been working on updates to our state insurance regulations since July 2025. The coming year may see these updates become final.

Washington State’s insurance regulations help level the playing field between consumers and insurance companies. When a loss happens, the consumer is typically struggling with property damage or injury, and doesn’t understand the mechanics of the claims process or the insurance policy fine print. The company, on the other hand, has the resources, knowledge, and expertise. This puts the policyholder at a disadvantage.

The proposed regulatory updates could help fix this. First, they formally define an insurance “claim.” You might think that whether a person has made an insurance “claim” would be basic. But basic doesn’t always mean easy to define (as anyone who’s watched NFL referees struggling to define a “catch” can confirm!). What often happens is the insured has a loss, calls their insurer in confusion, and then thinks they have a claim open only to find out, months later, that the insurer never actually opened the claim. This can lead to problems like damage getting worse, evidence being lost, and even unscrupulous insurers leveraging the delay against the policyholder. At least one court has held that policyholders have no legal recourse unless they explicitly demand their insurance benefits using the right “magic words.”

The proposed regulation properly places the onus to recognize and investigate claims on the party with superior resources: the insurer. 

Second, the proposed rules require transparency when insurers use databases to estimate losses. Computerized databases and estimating software can help in calculating the cost to repair property following a loss—when properly used as one tool that is a part of a comprehensive and fact-based investigation. But, too often, these databases are used as the end of the carrier’s investigation, not a starting point, resulting in a claims payment divorced from the facts, lacking the benefit of a complete investigation or the judgment of appropriate experts. Time and again, attorneys are approached by policyholders whose insurer insisted on paying only the amount generated by an arbitrary and opaque database even though no local contractor can complete the work for that price. This practice shifts the burden of investigating to the insured, who must now work with their contractor and appropriate experts to itemize the reasons why the work cannot be performed for the price in the insurer’s database. It delays making the insured whole after a loss. It pressures insureds to accept less than the policy entitles them to. 

OIC’s proposal would fix this by specifying that a reasonable investigation does not consist solely of blind reliance on database pricing and by requiring insurers who use these databases to disclose their data.

Third, the new rules would require insurance companies to promptly approve emergency mitigation. Homeowners’ insurance policies typically require the homeowner to perform emergency mitigation and can permit the insurer to terminate coverage for losses that are made worse by the insured’s failure to do so. When insurers drag their feet in approving emergency mitigation, the policyholder risks a loss of coverage, further damage to their property, and paying out of pocket for work that their carrier may later refuse to cover.

Requiring insurers to approve emergency mitigation promptly avoids placing the vulnerable and unsophisticated insured in the position of making important decisions without the benefit of the insurer’s superior expertise and resources. 

Fourth, the Insurance Commissioner’s new regulation would require insurance companies to share their documents about a claim with the policyholder. Attorneys routinely see insurer claim files kept secret from the insured only to be revealed during discovery in litigation.

Requiring transparency during the claim permits the insured to address issues before claims reach the point of a lawsuit. A consumer in full possession of the facts can point out problems while there is still time to fix them, provide missing information the carrier overlooked, and otherwise protect their interests.

Hopefully, the Office of the Insurance Commissioner will make finalizing these updates a priority in 2026.