Supreme Court Rules that ERISA Preempts State Law Claims Challenging Utilization Review by HMO
New York State Bar Association Health Law Journal, Vol. 9, No. 3, p. 70, Summer/Fall 2004
5 Pages Posted: 6 Jan 2010
Date Written: 2004
This article reports on Aetna Health Inc. v. Davila, the 2004 United States Supreme Court ruling that members of ERISA health plans cannot sue their plan administrators for consequential damages for injuries the members suffered allegedly due to the administrators’ coverage decisions. The Aetna ruling confirmed the historical view that ERISA plan participants and beneficiaries are limited to the civil remedies set forth in section 502(a) of ERISA. The Aetna decision squelched several theories advanced by lower courts that had found that such claims for consequential or punitive damages did not fall within ERISA section 502(a), and therefore were not preempted by ERISA. While the Aetna ruling limits potential liability of ERISA plans and thereby helps to conserve their assets, it also leaves members who allegedly suffer physical injury from negligent utilization review largely without a remedy.
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