Fordham H.E.A.L.S.

Fordham University School of Law

May 3, 2010

To Whom It May Concern:

My name is Domna Antoniadis and I am writing on behalf of Fordham Health, Education,

Advocacy and Law Society, a student run organization at Fordham University School of Law. I 

am writing because we think The Wellstone Act should outline methods of enforcement and 

remedies available in the event of a breach by a utilization review organization. 

Will ERISA be amended to include a remedy should an individual be denied coverage under the 

Wellstone Act? May an individual seek damages or is there only equitable relief? The rule

states that “if the state law provides for more protection than the federal law, it is not 

preempted.” Does this mean that the state law regulating the parity benefit is not preempted by 

ERISA? If ERISA is not amended and does in fact preempt recovery for breach of the Wellstone 

Act, or of state parity laws, then what incentive will be used to ensure that the parity laws are 

followed? 

ERISA's wide preemption clause extends to any claim that "relates to" an employee benefit plan. 

Most mental health benefits are made available from an ERISA plan thus limiting the possible 

remedy to those stipulated under ERISA. Although ERISA has a “savings clause” which allows

states to regulate insurance, the Supreme Court has not extended this to utilization review by 

insurance companies. In Aetna v. Davila, the plaintiff was denied relief under state law because 

the Court struck down the argument that the complained of actions arose separately from ERISA. 

The suit was brought under a state law implying that the plans “controlled, influenced, 

participated in and made decisions which affected the quality of the diagnosis, care, and 

treatment” in a manner than violated “the duty of ordinary care..." The Court ruled that although 

the decisions may have been medical in nature, the individual would not have even had the 

medical benefits if not for the employee benefit plan. Since the alleged breach occurred in 

relation to the ERISA regulated benefit plan, it was considered within the scoop of ERISA law.

ERISA preemption of insurance utilization review prevents states from enforcing insurance law. 

In Davila, Justice Ginsburg in her concurring opinion stated, “I also join the „rising judicial 

chorus urging that Congress and [this] Court revisit what is an unjust and increasingly tangled 

regime.‟ Because the Court has coupled an encompassing interpretation of ERISA‟s preemptive 

force with a cramped construction of the „equitable relief‟...a „regulatory vacuum exists: 

„Virtually all state law remedies are preempted but very few federal substitutes are provided.”

We feel that MBHO's (managed behavioral healthcare organizations) should not be included in 

the ERISA preemption clause (ERISA was established prior to the huge MBHO movement but 

has not been updated accordingly). At the moment, ERISA preemption limits recovery against 

MBHO negligence to only denied benefits (and sometimes attorney fees). As many of you know, 
Fordham H.E.A.L.S.

Fordham University School of Law

especially in mental health managed care, utilization review is often done as a prior 

authorization, not retroactive authorization. As a result individuals often do not receive the 

treatment. The current ERISA standard does not address how to rectify this type of wrongful 

denial of treatment. If ERISA does not provide an adequate remedy for utilization review 

misconduct (such as inefficient adherence to parity laws) then a state must be able to enforce

these laws.

Thank you for taking the time to consider our comments.

Best Regards,

Domna Antoniadis

President

Fordham H.E.A.L.S. 

Health, Education, Advocacy & Law Society