The First Circuit has affirmed two lower court dismissals of lawsuits challenging health plans’ exclusion of weight-loss drugs.  As a reminder, under ACA Section 1557, covered entities are prohibited from discriminating on the basis of protected characteristics—including race, color, national origin, sex, age, or disability.  Only group health plans receiving federal assistance from HHS are considered covered entities under Section 1557, but in practice most plans do not receive federal assistance directly from HHS, therefore most plans are not directly subject to Section 1557.  However, most carriers (including related TPAs) are subject to Section 1557 through receipt of Marketplace subsidies.  The risk of a Section 1557 lawsuit for employers then, is that a carrier or TPA subject to litigation changes its clients’ plans or requires client indemnification for the carrier’s continued exclusion to avoid further litigation.

• In Whittemore v. Cigna Health, the First Circuit held that a participant did not plausibly allege she had a disability simply by stating she had been diagnosed with obesity and prescribed medication to treat it. The plaintiff filed the lawsuit alleging disability discrimination under ACA Section 1557.  The court explained that to state a disability discrimination claim, the participant had to show she was disabled as defined by the ADA—that defines disability as a physical or mental impairment that “substantially limits one or more major life activities.”  The participant’s complaint alleged that her obesity substantially limited her in major life activities such as walking, standing, and sleeping.  The court, however, concluded that these allegations were conclusory “threadbare recitals of the elements of a cause of action.”  The court also rejected the participant’s argument that any individual diagnosed with obesity and prescribed medication for it is, by definition, substantially limited in the operation of major bodily functions—reasoning that such general statements about obesity’s potential health impacts do not plausibly support an inference that every person in that category is disabled under the ADA.  So, this case is an example that a medical diagnosis by itself will not automatically rise to disability discrimination under ACA Section 1557. 
• Then in Holland v. Elevance Health, the First Circuit affirmed the dismissal of another proposed class action disability discrimination claim for failure to cover weight-loss drugs. In this case, an employee who was diagnosed with obesity and prescribed FDA-approved weight-loss medications sued her health plan’s insurance administrator after it denied coverage based on a plan exclusion for weight-loss medications.  The participant alleged that the exclusion violated ACA Section 1557 by discriminating against her on the basis of disability.  The First Circuit concluding the participant had not plausibly shown that the exclusion disproportionally impacts people with disabilities.  The court noted that the medications are also approved for overweight individuals who are not disabled, so the “fit” between the excluded service and the protected class was not sufficiently close.  The court also rejected the claim of intentional discrimination, concluding the exclusion was facially neutral because it applied to all enrollees seeking weight-loss drugs, not just those with obesity.
• While litigation involving ACA Section 1557 claims are in flux, these holdings state that a broad exclusion for weight-loss drugs does not, by itself, state a claim for disability discrimination under ACA Section 1557. So, these decisions offer some reassurance to plan sponsors that have similar weight-loss drug plan exclusions.