District Court Finds Private Right of Action to Enforce No Surprises Act IDR Determinations 

On May 14, 2025, the U.S. District Court for the District of Connecticut largely denied motions to dismiss filed by Aetna Health and Life Insurance Company and its affiliates (Aetna) and Cigna Health and Life Insurance Company (Cigna) in a case brought by multiple air ambulance companies seeking payment on unpaid bills in amounts determined by the No Surprises Act (NSA) Independent Dispute Resolution (IDR) process. Guardian Flight LLC v. Aetna Life Insurance Co. Inc., No. 3:24-cv-00680, involves claims under the NSA and under § 502 of ERISA. Aetna and Cigna moved to dismiss the ERISA claims for lack of standing and the entire suit on grounds that the air ambulance providers failed to state a claim. The court dismissed the plaintiffs' ERISA claim for prospective equitable relief but allowed the remainder of the claims to move forward, finding that the air ambulance companies did have standing to bring claims under ERISA as assignees and that the NSA provides a private cause of action to enforce IDR awards. This decision adds to a growing split among lower courts on the issue of whether the NSA allows providers and insurers to sue to enforce its mandates.

The dispute in the case centers on a number of out-of-network air ambulance transports provided by the plaintiffs to participants of health plans administered or insured by Aetna or Cigna. The air ambulance companies initiated the NSA's IDR process seeking payment from Aetna and Cigna for those transports, claiming that the defendants had made unreasonably low initial payments. The court reported that the IDR entities rendered determinations on the claims in amounts significantly higher than the defendants had originally paid, ordering Aetna and Cigna to pay the providers the difference. The court reported that the defendants failed to comply with the IDR determinations, asserting, "Defendants' 'low pay, late pay or no pay' scheme has become a widespread business practice" in response to IDR determinations. The plaintiffs brought suit seeking enforcement of the IDR awards under the NSA and under ERISA § 502(a)(1)(B) for denial of benefits, an injunction ordering the defendants to pay future IDR determinations under ERISA § 502(a)(3), and relief under the Connecticut Unfair Trade Practices Act. 

In their motions to dismiss, Aetna and Cigna argued that the NSA does not provide a private cause of action to enforce IDR determinations, relying heavily on Guardian Flight LLC v. Health Care Services Corporation, 735 F. Supp. 3d 742, 749 (N.D. Tex. 2024). They noted that the NSA IDR process, while it incorporated some aspects of the Federal Arbitration Act (FAA), did not include the FAA provisions regarding confirmation of arbitration awards in court, indicating that Congress did not intend for parties to be able to bring IDR determinations to court. The Connecticut court disagreed with the Texas decision, finding "key differences between arbitration awards under the FAA and IDR awards under the NSA," and stating that IDR awards are binding, unlike FAA awards that require court involvement to bind the parties. 

Further, the court opined: 

[T]he NSA's text and structure evinces an intent to allow for judicial enforcement.... the NSA contains strong, mandatory language regarding health plans' and insurers' payment obligations and the 'binding' effect of IDR awards. 

The decision noted that "any other interpretation would render IDR awards meaningless," a result it asserted is unwarranted by the text and evinced intent of the NSA.

On the ERISA claims, Aetna and Cigna argued that the air ambulance companies did not have standing to bring claims for benefits under ERISA § 502(a)(1)(B), which allows suit by a "participant or beneficiary," both because they had not alleged an injury to establish constitutional standing and because they are not participants or beneficiaries giving rise to "statutory standing" under ERISA. The court found that the plaintiffs "plainly" established constitutional standing, as they claimed that the defendants failed to pay them amounts that they are owed, constituting "an actual injury." The decision questioned the relevance of both parties' briefing on whether the assignment of participants' benefit claims to the plaintiffs impacted the constitutional injury-in-fact analysis. Though stating that the parties need not have addressed assignment in the context of the plaintiffs' constitutional standing, the court still found for the plaintiffs on the issue, asserting that the participants did still suffer an injury when their insurers failed to provide benefits for which the participants were contracted, obviating any issue as to the standing of their assignees, the plaintiffs.

Further, the court found that the air ambulance providers had valid assignments from the participants to bring a § 502(a)(1)(B) claim under Second Circuit law. The decision notes that the NSA was incorporated into ERISA, so it did not matter that the providers' right to payment stemmed from the NSA and not from the § 502(a)(1)(B) ERISA-created right for participants and beneficiaries. 

The court did, however, dismiss the plaintiffs' ERISA § 502(a)(3) claim seeking a prospective injunction to force Aetna and Cigna to pay future IDR determinations. The decision states that because an adequate legal remedy under ERISA § 502(a)(1)(B) exists, additional equitable relief is unavailable under Supreme Court precedent. 

Finally, the court also denied the defendants' motions to dismiss the state law claims on the basis of preemption. The court concluded that the Connecticut Unfair Trade Practices Act claims did not conflict with the terms of the NSA, nor were they preempted by ERISA § 514. In denying the ERISA preemption claim, the court stated: "Plaintiffs' claim does not derive from any rights or obligations established by an ERISA plan, but instead is grounded in Defendants' independent duty to reimburse out-of-network air ambulance providers. And Plaintiffs' claim applies equally to all insurance plans, not just those governed by ERISA.... Defendants have not explained how this would impact relationships among the core ERISA entities or affect central ERISA functions."

This ruling was a significant win for the air ambulance providers (and NSA-covered providers generally) on almost every count and may embolden future suits by providers under the NSA and ERISA. The case will now proceed in the district court. In the meantime, a decision from the Fifth Circuit on t whether the NSA provides a private right of action is expected soon in Guardian Flight v. Health Care Service Corp., No. 24-10561, which may further alter the legal landscape for these provider claims.

Tri-Agencies Issue MHPAEA Non-Enforcement Policy

On May 15, 2025, the U.S. Departments of Labor (DOL), Health and Human Services (HHS), and the Treasury (collectively, the Departments) issued their non-enforcement policy with respect to the 2024 amendments to tri-agency regulations implementing the Mental Health Parity and Addiction Equity Act (MHPAEA) and the 2020 amendments thereto that were part of the Consolidated Appropriations Act, 2021 (CAA) (2024 Final Rule). As we reported last week, the Departments requested that litigation filed by The ERISA Industry Committee (ERIC) challenging the 2024 Final Rule be held in abeyance while the Departments reconsider that rule.

According to the non-enforcement policy:

[t]he Departments will not enforce the 2024 Final Rule or otherwise pursue enforcement actions, based on a failure to comply that occurs prior to a final decision in the litigation, plus an additional 18 months. This enforcement relief applies only with respect to those portions of the 2024 Final Rule that are new in relation to the 2013 final rule. The Departments note that MHPAEA's statutory obligations, as amended by the CAA, 2021, continue to have effect. HHS encourages states that are the primary enforcers of MHPAEA with respect to issuers to adopt a similar approach to enforcement. 

In addition, the Departments state that "[p]lans and issuers may continue to refer to the 2013 final rule (as it appeared in the Federal Register on November 13, 2013), FAQs About Mental Health and Substance Use Disorder Parity Implementation and the Consolidated Appropriations Act, 2021 Part 45... and other subregulatory guidance issued by the Departments under MHPAEA." The Departments also state they will "undertake a broader reexamination of each department's respective enforcement approach under MHPAEA, including those provisions amended by the CAA, 2021." Because the non-enforcement policy impacts only the 2024 Final Rule, plans will still need to comply with MHPAEA, the 2013 regulations, and the CAA amendments, including the written comparative analysis requirement.

Intuit Settles Forfeiture Lawsuit for $2 Million 

On May 16, 2025, the plaintiffs in the Rodriguez v. Intuit Inc., et al., No. 5:23-cv-05053 (N.D. Cal. 2025) lawsuit filed a motion for preliminary approval of a settlement reached between the parties in April 2025. According to the motion and accompanying memorandum, the defendants have agreed to pay nearly $2 million to the proposed class of participants in the Intuit 401(k) Plan (the Plan) to resolve the lawsuit filed in October 2023 alleging Intuit and its benefits committee violated ERISA in their management of the Plan by using forfeited assets to reduce the company's matching contributions instead of allocating the funds to pay the Plan's administrative expenses. The complaint alleged that during the relevant period, the participants incurred over $3.1 million in deductions from their accounts for Plan expenses that could have been covered by the forfeitures and that Intuit's matching contributions were reduced by over $15 million.

The parties reached their settlement following an October 2024 decision in which the court denied in part the defendants' motion to dismiss the complaint allowing most of the plaintiffs' claims to proceed. The proposed settlement covers over 32,000 participants who participated in the Plan over the class period from January 1, 2018, through December 31, 2021. The plaintiffs' motion for preliminary approval of the settlement states that the nearly $2 million settlement payment is equal to 63 percent of the Plan expenses incurred by participants during the class period. 

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