1. Case Name: Coalition for Parity, Inc. v. Kathleen Sebelius, et al., United States District Court for the District of Columba, April 1, 2010
2. Type of Treatment Services Denied: N/A
- Counsel for Plaintiff: Jeffrey Lee Poston; Crowell & Moring LLP
- Counsel for Defendant: Bonnie J. Prober, U.S. Department of Justice
4. Format: Memorandum Opinion
- ERISA Claim? N/A
- Class Action or Individual Action? Individual
- Defendant? Secretaries of Health and Human Services, Labor and Treasury, along with their respective Departments
- Type of Insurance Plan? N/A
- Type of Coverage Denial? N/A
6. Legal Pointer: The TRO was aimed at enjoining the IFR from being implemented.
7. Legal Issues and Causes of Action: Plaintiffs filed action against the Secretaries of Health and Human Services, Labor and Treasury, along with their respective Departments seeking to enjoin implementation of regulations promulgated to enforce the provisions of MHPAEA. Plaintiff filed the Complaint on April 1, 2010, the same date as the Memorandum Opinion. Together with the Complaint, Plaintiffs filed an Application for Temporary Restraining Order (TRO) and a Motion for Preliminary Injunction. After Defendants were served with the Complaint, the Court asked Defendants to provide the Court with an opposition to the Application for TRO and Plaintiff provided the Court with a brief in reply.
- Ruling: The Court denied Plaintiff’s Application for TRO.
8. Narrative Case Description: Plaintiff contends that it will be irreparably injured because the IFR impose substantive regulations that will directly impact it. The parties disagreed over whether the substantive provisions of the IFR were binding on Plaintiffs as of the Rules’ effective date, April 5, 2010, or on the applicability date, which was no earlier than July 1, 2010.
Defendants asserted that the effective date means that the IFR will be published in the Code of Federal Regulations on that date and that the plain language of the regulations indicates that none of their substantive provisions will apply prior to July 1, 2010. Defendants stated that the purpose of having an effective date in April 2010 was to give all affected parties a three-month period in which to get into compliance with the new regulations. Thus, Defendants stated that Plaintiff has no obligations beginning April 5, 2010 with respect to the IFR.
Plaintiff, however, argued that the applicability date of July 1, 2010, only extended to provisions that would be encompassed by an actual plan, and that there were substantive provisions in the IFR that go into effect on April 5, 2010, such as the nonquantitative treatment limitations.
The Court determined that the plain language of the Rules stated that the requirements of this section were applicable for plan years beginning on or after July 1, 2010. The Rules did not say that only some of the requirements were applicable on that date or that the section applied only to provisions that were incorporated in a plan. Therefore, the Court agreed with the Defendants’ reading of the IFR and found that they imposed no obligations affecting Plaintiff immediately on April 5, 2010.
Plaintiff additionally argued that although the government would not enforce the IFR until July 1, 2010, private parties may enforce the Rules as of April 5, 2010, potentially. In support of this proposition, Plaintiffs relied on a paragraph from the IFR: “Because the statutory MHPAEA provisions are self-implementing and are generally effective for plan years beginning after October 3, 2009, many commenters asked for a good faith compliance period from Departmental enforcement until plans (and health insurance issuers) have time to implement changes consistent with these regulations. For purposes of enforcement, the Departments will take into account good-faith efforts to comply with a reasonable interpretation of the statutory MHPAEA requirements with respect to a violation that occurs before the applicability date of paragraph (i) of these regulations. However, this does not prevent participants or beneficiaries from bringing a private action.” However, Defendants argued, and the Court agreed, that the paragraph was clearly referring to actions that may be brought under the statute itself, not actions that may be brought for violations of the IFR.
Thus, because the IFR did not have any substantive effect until July 1, 2010, the Court found there was no irreparable harm to Plaintiff if the temporary restraining order was not granted.
During the TRO hearing, Defendants raised the question of whether Plaintiff had standing to challenge the IFR since Plaintiff represented neither group health plans nor health insurance issuers, the two entities directly regulated by the IFR. The Court found at this preliminary stage that Plaintiff had standing to seek injunctive relief as a representative of parties who were in privity with group health plans or health insurance issuers directly regulated under the IFR.
9. Additional Comments: None
11. Practical Implications and Lessons Learned: None.
12. All Legal Theories Presented in Case: N/A
13. Successful Legal Theories in Case: N/A