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From Health Reform WK-EDGE, February 11, 2019

No private right of action for termination, cancellation of coverage under ACA

By Patricia K. Ruiz, J.D.

A Florida court found no private right of action for an individual whose insurance coverage under the ACA was terminated without notice.

The Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) does not create a private right of action for an insured individual whose insurance coverage was cancelled without notice, resulting in tax penalties. The Middle District of Florida granted a motion by Blue Cross and Blue Shield of Florida (Blue Cross) to dismiss an individual’s amended complaint (Rosenberg v. Blue Cross and Blue Shield of Florida, Inc., January 31, 2019, Hernandez, V.).

An individual had since January 1, 2018, Florida Blue Affordable Care Act Qualified Policy, which was on automatic renewal and automatic payment of insurance premiums. She purchased a new Blue Cross and Blue Shield of Florida policy for herself and four family members in November of 2017. On or around December 29, 2017, Blue Cross withdrew an authorized automatic payment for her ACA policy and sent her a notice it had withdrawn the payment. On July 11, 2018, the individual attempted to log in to her online Blue Cross account but could not. Upon inquiry, she was informed her policy had been terminated as of May 31, 2018 and that Blue Cross would not be reinstating the policy. Blue Cross sent the only notice of cancellation to the individual after the July 11 phone call.

The individual sued Blue Cross alleging that because of the "unreasonable and unlawful termination/cancellation of coverage," she had been subjected to immediate and irreparable harm, including loss of coverage for potential illness, which forced her to purchase a short-term policy that provided inadequate and unequal coverage. She also alleged she incurred out of pocket health care expenses and tax penalties because of the wrongful termination of her policy. She asserted claims under the ACA, the Health Insurance Portability and Accountability Act (HIPAA) and the Florida Deceptive and Unfair Trade Practices Act (FDUTPA), among other claims.

No private right of action under the ACA. The individual asserted claims under two subsections of the ACA: one that provides that a health insurer must renew or continue in force health insurance coverage at the option of the plan sponsor or the individual, unless an exception applies, including that the individual failed to pay premiums or contributions in accordance with the terms of the health insurance coverage or that the insurer has not received timely premium payments; and another under which an issuer offering group or individual health insurance coverage must not rescind the plan or coverage once the enrollee is covered except with prior notice to the enrollee. The court found that neither section explicitly creates a private right of action for insureds.

The individual asserted that she had a private right of action because of the tax penalty that applied to her as a result of the cancellation. However, the court was not persuaded by her argument, as the individual’s complaint does not challenge the federal government’s imposition of the tax penalty. Furthermore, the application of the tax penalty did not create and does not reflect an intent to create an implied right of action.

The court further found that no private right of action existed under similar provisions in HIPAA and FDUTPA.

The case is No. 8:18-cv-2648-T-33SPF.

Attorneys: Bruce S. Rosenberg (Rosenberg Law, PA) for Heather Rosenberg. Audrey M. Pumariega (McDermott, Will & Emery, LLP) for Blue Cross and Blue Shield of Florida, Inc. d/b/a Florida Blue.

Companies: Blue Cross and Blue Shield of Florida, Inc. d/b/a Florida Blue

Cases: CaseDecisions EnrollmentNews IndividualMandateNews FloridaNews NewsFeed

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