“Can They Sue Us for That?”: The Risk of Lawsuits Arising From the ACA

Compliance decisions are driven by a number of factors. One is the need to avoid enforcement actions by state or federal regulators. Another is a fear of private lawsuits. Any lawsuit is trouble for a company. Even a frivolous or meritless suit involves time and expense, not to mention negative publicity.

The Affordable Care Act would seem to be the type of law that could give rise to private litigation. The risk of lawsuits arising under the Act may, however, be overstated. The ACA does not create a private right of action for enforcement of health market reforms. There is no explicit language in the Act that gives an individual aggrieved by an alleged violation a right to sue.

Lack of explicit language does not necessarily mean that there is no right to bring a private suit. Federal courts have found that, in some circumstances, there is an implied right to bring a private action. These circumstances include:

  • Whether the statute creates a federal right in favor of the person bringing the suit;
  • Any suggestion in the law’s legislative history to the effect that Congress intended to create a private right of action;
  • Whether providing a private right of action is consistent with the law’s design; and
  • Whether the right of action implied is one that traditionally would be based in state, rather than federal, law.

A 2012 GAO report determined that an implied private right of action was unlikely to be found in the ACA. The report looked at the factors listed above, and concluded that the ACA is not the type of law that was enacted for the benefit of individuals. There is also nothing in the ACA’s legislative history showing Congressional intent to create a private right of action, and such an action would be inconsistent with the overall design of the ACA. The report also noted that the practice of medicine has traditionally been a matter for state, not federal, regulation.

The ACA does, however, incorporate several laws that provide enforcement mechanisms for the different ACA sections. The Employee Retirement Income Security Act (ERISA) authorizes a private right of action for health plan participants and beneficiaries to recover benefits or enforce rights under a health plan. Thus, private plaintiffs could use the ERISA right of action to enforce ACA requirements in health plans in which they participate. These ERISA-based actions provide for the recovery of unpaid benefits or equitable relief. Commentators expect a significant amount of ERISA-based litigation in the coming years by private plaintiffs seeking to enforce ACA requirements in health plans.

The ultimate decision on private rights of action will rest with the courts. Interested parties will be closely monitoring the courts for relevant case law developments.


For further information, we invite you to download the following Legal Insights White Paper:

The Affordable Care Act: Mandated Benefits Compliance Standards

Further Reading and References:

Dominion Pathology Laboratories, P.C. v. Anthem Health Plans of Virginia, Inc., 2015 WL 3830931, — F.3d — (June 19, 2015) (finding no private right of action under §2706 of the Affordable Care Act)
Neil H. Ekblom, Finding a Private Right of Action in the Affordable Care Act, available at http://www.leclairryan.com/files/Uploads/Documents/Finding%20a%20Private%20Right%20of%20Action%20in%20the%20Affordable%20Care%20Act.pdf
Government Accounting Office, Causes of Action under the Patient Protection and Affordable Care Act, B-322525 (Mar. 23, 2012), available at http://www.gao.gov/products/P00407
Todd Leeuwenburgh, Penalties Await Plans That Ignore ACA’s High-Litigation Risk (Apr. 29, 2014), available at http://smarthr.blogs.thompson.com/2014/04/29/penalties-await-plans-that-ignore-acas-high-litigation-risks/
Mark C. Nielsen and Tamara S. Killion, View From Groom: DOL and HHS Enforcement Activities Targeting Health Plans and Insurers (Jan. 30, 2015), available at http://www.groom.com/media/publication/1531_View_from_Groom_DOL_and_HHS_Enforcement_Activities_Targeting_Health_Plans_and_Insurers.pdf