Anti-assignment clauses in ERISA health plans are useful to plan sponsors in fending off lawsuits by out-of-network providers. Federal courts have consistently upheld anti-assignment provisions contained in the plan document and/or the summary plan description (SPD).
In a recent unpublished ERISA case, the US Court of Appeals for the 9th Circuit held that the anti-assignment language contained in the major medical benefit booklet for a self-funded ERISA plan was not a term incorporated by reference into the governing plan document and was unenforceable against the out-of-network emergency medical provider seeking payment of plan benefits paid by the plan to participants. See Martin Luther King, Jr. Community Hospital v. Community Insurance Company DBA Anthem Blue Cross Blue Shield. The 9th Circuit found that the SPD incorporated only the claims and payment terms from the major medical benefit booklet and that the anti-assignment provision was not a term or condition of receiving benefits and should not be incorporated into the plan document. The dissenting opinion disagreed with the majority and would have incorporated the anti-assignment provision into the plan document based on the incorporation language.
The key points we learn from this case are:
For assistance with reviewing your governing plan document and anti-assignment provisions, please reach out to any member of our team.
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