IBM Health Insurance Plan ‘Discriminates’ Against Enrollees with Developmental Mental Health Conditions, Class Action Alleges

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A proposed class action alleges IBM has discriminated against health insurance plan enrollees with developmental mental health conditions, including Autism Spectrum Disorder, by routinely excluding or limiting coverage for speech, occupational and physical therapies. 

The 20-page lawsuit alleges that while early diagnosis and intensive provision of medically necessary applied behavior analysis (ABA), neurodevelopmental therapies (NDT) and other services are essential in dramatically improving the health and well-being of those with mental health conditions, the defendants—IBM, its Medical and Dental Benefits Plan for full-time and part-time employees, the plan’s administrator and the IBM Medical Benefits Trust—have chosen to not cover such under the company’s plan.

Instead of providing coverage for developmental mental health conditions at parity in its medical and dental benefits plan, IBM has created “a separate and unequal group health plan,” called the Special Care for Children Assistance Plan (SCCAP), for employees’ dependents under the age of 26 with developmental disabilities, the lawsuit relays. 

According to the complaint out of New York federal court, IBM’s SCCAP provides “separate, unequal, and lifetime-limited health benefits” for IBM employees’ dependents with developmental disabilities. The SCCAP benefits, which have a lifetime limit of $50,000 despite the Affordable Care Act’s prohibition on lifetime financial caps, for ABA, NDT and certain other services are only paid after an enrollee has demonstrated that coverage within the IBM health plan has been denied or exhausted and no other recourse exists, the lawsuit says. 

The case claims IBM’s SCCAP also violates federal Medicaid law and the Employee Retirement Income Security Act of 1974 (ERISA) by attempting to limit its benefits to only claims that remain uncovered after public assistance. Overall, IBM’s SCCAP violates a law known commonly as the Federal Mental Health Parity Act, which was designed to end discrimination in the provision of health insurance coverage for mental health and substance abuse disorders, the case claims. 

From the lawsuit: 

“The only way [the plaintiff] and similarly situated class members can obtain coverage for these essential and medically necessary services to treat their mental health conditions is to obtain a denial of coverage under the Plan, and then seek coverage through the SCCAP, a plan separately administered by IBM that imposes a combined lifetime limit on such coverage of $50,000.” 

The lawsuit looks to represent all individuals who have been or are participants or beneficiaries under the IBM Medical and Dental Benefits Plan for Regular Full-Time and Regular Part-Time Employees in effect during the relevant limitations period, and anyone who received, or requires ABA, NDT or other excluded services to treat developmental mental health conditions. 

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