Schmitt v. Kaiser Foundation Health Plan of Washington

[4] UNITED STATES DISTRICT COURT 5 WESTERN DISTRICT OF WASHINGTON AT SEATTLE [7] ANDREA SCHMITT, et al., Cause No. C17-1611RSL [8] Plaintiffs, ORDER DENYING [9] v. DEFENDANTS’ MOTION 10 TO DISMISS THE FOURTH KAISER FOUNDATION HEALTH PLAN AMENDED COMPLAINT 11 OF WASHINGTON, et al., [12] Defendants. [14] This matter comes before the Court on “Defendants’ 12(b)(6) Motion to Dismiss Fourth [15] Amended Complaint.” Dkt. # 72. Having reviewed the memoranda submitted by the parties1 and [16] 17 construing the Fourth Amended Complaint in the light most favorable to plaintiffs, the Court [18] finds as follows: [19] (1) Plaintiffs have plausibly alleged that hearing loss is a viable proxy for hearing [20] 21 disability, such that defendants’ hearing loss exclusion raises an inference of discrimination [22] against the protected group under Section 1557 of the Affordable Care Act, 42 U.S.C. § 18116 . [26] 1 This matter can be resolved on the papers submitted. Defendants’ request for oral argument is [27] DENIED. 28 ORDER DENYING DEFENDANTS’ MOTION 1 (2) Plaintiffs’ “Breach of Contract and Violation of RCW 48.43.0128” claim is also [2] plausible. Plaintiffs do not assert a cause of action directly under RCW 48.43.0128, but rather [3] allege that the statute voids and makes unenforceable the hearing loss exclusion. O.S.T. ex rel. [4] 5 G.T. v. BlueShield, 181 Wn.2d 691, 707 (2014) (a blanket exclusion of neurodevelopmental [6] therapies that violates the mental health parity act “is void and invalid as a matter of Washington [7] law.”); Brown v. Snohomish Cnty. Physicians Corp., 120 Wn.2d 747, 753 (1993) (“[L]imitations [8] 9 in insurance contracts which are contrary to public policy and statute will not be enforced . . . [10] .”); RCW 48.18.200(2) (“Any such condition, stipulation, or agreement in violation of this [11] section shall be void . . . .”); RCW 48.18.510 (“Any insurance policy, rider, or endorsement [12] 13 hereafter issued and otherwise valid, which contains any condition or provision not in [14] compliance with the requirements of this code, shall not be rendered invalid thereby, but shall be [15] construed and applied in accordance with such conditions and provisions as would have applied [16] 17 had such policy, rider, or endorsement been in full compliance with this code.”). While most [18] such disputes are resolved in the context of a declaratory judgment action, a denial of coverage [19] based on a void and unenforceable exclusion could arguably be a breach of contract under [20] 21 Washington law. See O.S.T. ex rel. G.T., 181 Wn.2d at 695 (acknowledging breach of contract [22] claim asserted against insurer which denied coverage based on a contractual term that was [23] invalid, void, and unenforceable). Because plaintiffs have alleged a plausible claim of disability [27] 28 ORDER DENYING DEFENDANTS’ MOTION 1 discrimination in the design and/or implementation of its hearing-related benefits, this claim [2] may proceed.2 [4] 5 For all of the foregoing reasons, defendants’ motion to dismiss (Dkt. # 72) is DENIED. [7] Dated this 4th day of August, 2022. [10] Robert S. Lasnik 11 United States District Judge [26] 2 Defendants have not shown how a regulation, such as WAC 284-43-5642, could trump a statute [27] under Washington law. 28 ORDER DENYING DEFENDANTS’ MOTION