Department of Labor Sues United Healthcare for Violating ERISA and Mental Health Parity Law

The federal Department of Labor (DoL) has sued UnitedHealthCare for alleged discrimination against patients seeking mental health treatment. DoL contends that UnitedHealthCare, one of the country’s largest health insurers, systematically imposes illegal limitations on coverage for mental health and substance abuse disorder treatment. The August 11, 2021 lawsuit alleges these practices violate ERISA. DoL also asserts UnitedHealthCare is violating the Mental Health Parity Act, a federal law prohibiting discrimination against people with mental health conditions:

Basically, DoL alleges UnitedHealthCare did this in two different ways: (1) paying less for out-of-network mental health treatment than it pays for out-of-network medical and surgical care; and (2) singling out mental health treatment for a special “review program” that limited these benefits in a way that was not applied to similar non-mental health treatment. This is alleged to have happened as far back as 2013.

This isn’t the first time UnitedHealthCare has found itself in court over mental health coverage. A prior lawsuit by made similar allegations, resulting in a ruling that the insurance company had illegally discriminated against mental health patients through secret internal guidelines making it harder to access mental health treatment in order to boost corporate profits.

But the fact that these practices have drawn the ire of federal regulators is significant. DoL is charged with enforcing violations of ERISA. But most federal regulators lack the resources to pursue any but the worst and most systemic violations. DoL’s choice to pursue this particular suit suggests the agency considers these practices to be especially egregious, particularly given the company has already been sued by private insureds.

Hopefully, this signals a pattern of more proactive ERISA enforcement by regulators.

Five Common Homeowner’s Insurance Policy Provisions and Why They Matter

Most folks have homeowner’s insurance (or its cousin renter’s insurance).  Homeowner’s insurance protects you from damage to your home (e.g., your house burns down) or from claims arising from someone’s injury on your property. (e.g., someone slips and falls in your backyard).

Homeowner’s insurance policies typically contain about 20 pages of fine print.  Depending on the specific language, your coverage and your duties after a loss can vary dramatically.  Here some common important provisions to look for and why they matter.

1.  Provisions defining the covered property. The address on the declarations page may not necessarily identify the property covered by the insurance policy.  For example, if you aren’t living in the property, the policy may not provide coverage even if the property is listed on the declarations page.  Some policies contain owner-occupancy provisions stating, for instance, “this policy covers the owner-occupied property listed on the declarations page.”

2. Provisions explaining what parts of the property are covered.  In addition to the main house, homeowner’s policies often provide additional coverage for ancillary structures on the property like sheds or garages.  Some policies provide coverage for all other structures on the property regardless of whether they were attached to the main house.  Other policies limit coverage to only structures that are physically connected to the house.

3. Business Use Coverage.  Insurers often deny coverage where the property has been used for business purposes.  The policy fine print is important to understanding whether and to what extent the property’s use for business purposes allows the insurer to deny claims.  Some policies exclude any use of the property for business purposes such as renting the property out to tenants or running an office at the property.  Others only exclude business use from specific coverage; for instances, renting the property to tenants might exclude claims if the tenant sues you because they slip and fall, but might not exclude coverage if the property burns down.

4. “Actual Cash Value” versus “Replacement Cost Value”.  If your house burns down, there are two ways to evaluate the dollar amount of your loss.  One way is to ask what the house was worth right before it burned down; this is the “Actual Cash Value.”  Another way to look at the loss is to ask what it would cost to rebuild the house; this is the “Replacement Cost Value.”  Typically, Replacement Cost Value is much higher than Actual Cash Value.  Your homeowner’s insurance policy will have detailed provisions for when the insurer pays Actual Cash Value versus Replacement Cost Value; often, the insurer will pay Actual Cash Value up front, then pay the remainder of the Replacement Cost Value once you complete repairs or replacement.  But insurers often miscalculate the Actual Cash Value, leaving you without sufficient funds to repair or replace the property and thereby stopping you from collecting the additional Replacement Cost Value.  It’s important to read these policy provisions carefully and make sure the insurer follows them.

5.  Additional Living Expenses.  Many homeowner’s policies cover your Additional Living Expenses, i.e., the extra costs you incur because you can’t use part of your home while it is damaged.  Additional Living Expenses might include living in a hotel while your home is repaired.  The specific policy language is critical because insurers often dispute whether an insured is entitled to Additional Living Expenses after a covered loss.  For example, if a fire is put out before it burns down your home but the home is full of smoke and water damage, is the property “liveable?”  What if the only damage is to the living room but you can’t use the entire first floor of your house during the repairs?  Understanding the specific policy language is important to knowing your rights in these situations.

Ultimately, the only way to know for sure what your rights under an insurance policy are is by consulting an attorney.  Hopefully, this guide can point you in the right direction.