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Insurance Now Subject to Federal Jurisdiction

Tuesday, December 15, 2009 Health Insurance News J E 4
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DENVER, Dec. 14 On December 9, 2009, the United States Court of Appeals, Tenth Circuit, affirmed the federal government's position that private insurance companies are "plans" and therefore subject to federal jurisdiction. (US vs. Frost)

Although other federal courts have held that contracts issued by insurance companies may be subject to federal jurisdiction under Title 18 Section 1347, US vs. Frost is the first case an insurance company itself has been held to be a "plan," because, as the government claimed in this case, all insurance companies are "plans." At trial and initially on appeal in this case, the government maintained the position that insurance contracts are "plans," but to avoid a constructive amendment, changed their theory claiming that all insurance companies are "plans" as a "matter of law" and the 10th Circuit agreed.

Ironically, the term "plan" was first adopted by ERISA in 1974. Although ERISA generally excluded insurance companies as "plans," the federal government now claims that health insurance companies are the private equivalent of Medicare and Medicaid which are "plans." Therefore, all insurance companies that make payments for the cost of medical services are "plans" under federal law. The 10th Circuit agreed and upheld the district court's finding that simply paying a medical claim qualifies an insurance company as a "plan."

Not only does this ruling open the door for the federal government to hold all insurance companies subject to ERISA, but it automatically and retroactively subjects all insurance companies to federal jurisdiction under Title 18, 669, 1035 and 1347 by qualifying them as "Health Care Benefit Programs" under 24(b).

If upheld by the Supreme Court, a quantum leap toward federal regulation of health insurance companies will be complete. Redcorn and Frost, the defendants in the case, stated they would ask the Tenth Circuit to reconsider the matter 'en banc' before they appeal to the Supreme Court.

This release was issued through The Xpress Press News Service, merging e-mail and satellite distribution technologies to reach business analysts and media outlets worldwide. For more information, visit http://www.XpressPress.com.

SOURCE Communicators Services Group
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