It now appears that the following will only apply to those plans which purchase coverage through the new proposed health insurance connectors.
The just released House version of health care reform contains a section with regard to ERISA pre-emption that applies to self-insured plans as well.
Simply put, this change would allow employees to file a claim in state court against the plan sponsor not only for the value of the claim, but for damages as well. In other words, the potential liability for employers is no longer limited to the value of the denied benefit as it is under ERISA via federal court.
If this provision is contained in the final version of health care reform it is a good bet that lawyers will find this a source for new income at the employers expense and unions may find this an interesting tool to encourage their members to seek legal redress for what now is a mere claim appeal.
Think of the open ended possibilities. An employee is denied a certain service as not medially necessary; an appeal is made to the employer and denied based on medical evidence. The employee then has additional medical problems; claims they are related to the previous services which were denied and files a lawsuit in state court for damages, pain and suffering and who knows what else.
How many employers will tolerate that kind of liability?
Of course, the proposed legislation bars this type of action from occurring under the new government option health plan.