The parents of a minor child sued their health plan insurer when it denied their daughter’s claims for benefits.  The parents argued that the insurer failed to comply with a state external review law for insurers, which required an independent review process for denied claims. The insurer asked the court to dismiss the claim, arguing that the state external review law was preempted by ERISA.

The court held that the external review law was not preempted by ERISA. The court reasoned that the state law did not pose a threat to ERISA’s enforcement scheme. The court rejected the insurer’s argument that the external review law was preempted under the Supreme Court’s Davila decision because it provided a separate remedial scheme that threatened the exclusive enforcement scheme established by ERISA.

The court ruled instead that a state law designed to strip the claims administrator of its unfettered discretion “does not implicate ERISA’s enforcement scheme at all” and is not different from the state laws regulating insurance that the Supreme Court has permitted to survive ERISA preemption.

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This entry was posted by Adam V. Russo on Friday, October 3rd, 2008 at 10:09 am and is filed under 9th, ERISA, Preemption. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.