District Court Finds that Medical Providers Lack Standing for Reimbursement Due to Plan’s Anti-Assig

A growing trend in ERISA litigation is when medical providers to have patients assign their rights under a health insurance plan to the provider. This enables the healthcare provider to sue under the ERISA framework as an assignee/third-party beneficiary of the insurance contract. One wrinkle in these assignments, however, is that most health plans contain an anti-assignment clause. Clear anti-assignment clauses in ERISA employee welfare benefit plans are enforceable. However, courts continue to debate as to what constitutes a clear anti-assignment clause. In a recent Wisconsin district court case, the court upheld an anti-assignment clause in a plan that specified that benefits may not be assigned to another party, including the right to bring legal action. Plan administrators should review their health and welfare plans to see if they contain anti-assignment clauses and review relevant case law in their jurisdiction to determine what constitutes a clear anti-assignment provision.

Univ. of Wisconsin Hospitals v. Aenta Health & Life Ins. Co., No. 15-cv-240 (W.D. Wis. Nov. 2, 2015)